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Home Prices Hit Record High Amidst Affordability Crisis
17 Jul
Summary
- Median home price reached an all-time high of $440,600 last month.
- Homebuyer affordability declined for the fifth consecutive month.
- New housing act aims to increase supply and address affordability issues.
The median price of existing homes reached an all-time high of $440,600 last month, despite slowing price gains. Homebuyer affordability declined for the fifth consecutive month in June, driven by high prices and rising mortgage rates. The income required to qualify for a mortgage, assuming a 20% down payment, is now $109,152.
While affordability was slightly better year-over-year due to income growth, recent inflation and the lingering effects of geopolitical events have pushed mortgage rates up. Experts predict slight improvements in affordability after the busy summer buying season, potentially further aided if mortgage rates return to earlier year levels.
A new bipartisan housing act was signed into law on July 11 to increase housing supply and address affordability. However, with a shortage of over 4 million homes, significant benefits for homebuyers are not expected for some time as the market adjusts.
