US Housing Market: Average Price Hits Record $407k as Sales Slump

    Photo: AFP/Getty Images [via The Guardian]

    The Facts

    • The median sale price for an existing (previously occupied) home in the US rose to $407,600 in May - an all-time high that is nearly 15% over last year's figure - according to the National Association of Realtors.

    • At the same time, however, existing home sales fell 3.4% from April - a decline of 8.6% from May 2021 - marking a two-year low in the otherwise hot sector.

    The Spin

    Narrative A

    Home sales have now returned to the more sustainable - and rational - levels of 2019, before the pandemic-induced spending spree set in. This is good news: although high mortgage rates will be a challenge for some buyers, they will also slacken demand and help to bring prices back to reality.

    Narrative B

    Higher mortgage rates may be necessary to cool off inflationary pressures, but they're making homes even more unaffordable for the vast majority of Americans. Homes that were affordable for middle-class Americans with a monthly budget of $2,500 are now well out of reach given the recent rate hikes and their impact on mortgage rates.

    Nerd narrative

    There's a 50% chance that the S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index will be at least 295 for January 2025, according to the Metaculus prediction community.

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