Historically-high mortgage rates combined with a decrease in the number of homes available for purchase helped push U.S. home prices higher for the seventh consecutive month in August, new data released Tuesday reveal.
“Home prices surged to a new record high in August as the affordability crisis continues to deepen,” Fox Business reported, citing results of the latest S&P CoreLogic Case-Shiller index.
Prices increased 0.4% nationally from July in August on a non-seasonally adjusted basis and were up 2.6% from their peak at the same time in 2022. Composite indices for groups of major U.S. cities yielded similar results.
Prices are being supported by a drastically lower of supply available homes, Realtor.com explains:
“For-sale inventories still remain drastically below pre-pandemic levels, with NAR reporting a dip of 8.1% to 1.13 million unsold homes in September. The lack of supply has supported home prices, even though buying a home takes up a greater share of income now. In fact, price reductions are rarer now than they were one year ago (17.8% vs. 20.2% according to Realtor.com), highlighting the fact that many sellers are pricing in line with buyer expectations.”
The U.S. median existing home sales price is currently $394,300, according to Realtor.com.
“The affordability problem is unlikely to be resolved anytime soon,” Fox Business predicts:
“With mortgage rates continuing to hover near the highest level in two decades, sellers who locked in a low rate before the COVID-19 pandemic began in early 2020 have been reluctant to sell, leaving few options for eager would-be buyers.”
The business and economic reporting of CNSNews is funded in part with a gift made in memory of Dr. Keith C. Wold.