High mortgage rates, reaching their highest level in 21 years, are driving up costs for home buyers and creating a sluggish housing market, with little relief expected in the near term.
US home prices are rising again after five months of declines, reaching a record high for the month of July, due to low inventory and homeowners refusing to sell amidst high mortgage rates.
New home sales in the US increased by 4.4% in July, outperforming expectations and highlighting the continued demand for new construction due to a shortage of existing affordable homes. Despite rising mortgage rates, buyers are turning to new homes, causing a decline in sales in the resale market. However, as mortgage rates continue to rise, builder sentiment may be negatively impacted and prices may need to be adjusted to attract buyers.
The average U.S. home price has increased by 2.6% to $382,000 due to a lack of inventory, which has dropped more than demand, and significant declines in home prices have been seen in areas such as Austin, Detroit, and Phoenix, according to an analysis by Redfin.
Zillow predicts that US home prices will continue to rise, with a 6.5% increase over the next 12 months, driven by tight inventory levels and high demand, while other firms like Moody's Analytics and Morgan Stanley believe there may be a decline in home prices by the end of 2024.
Home prices in the US climbed for the fifth consecutive month in June due to high demand, low supply, and increased mortgage rates, with the S&P Case-Shiller US National Composite home price index rising by 0.7% compared to May.
Home prices in the US have continued to rise for the fifth consecutive month, reaching near all-time highs, although high mortgage rates could impact further price gains for the rest of the year. Cities in the Midwest and New England saw the most notable price acceleration, while cities in the West experienced year-over-year price drops. Low inventory remains a challenge, with few homeowners wanting to sell, leading to higher prices and increased competition for available homes. In contrast, the rental market is offering more affordability as rental inventory increases.
Home prices in the US hit another all-time high in July, but month-to-month gains weakened and suggest a potential slowdown, likely due to rising mortgage rates and increased listings.
The share of million-dollar homes in the US is increasing, leaving homebuyers with limited affordable options and pushing essential workers out of communities they serve.
Idaho has experienced the highest increase in home prices over the past decade, with a growth rate of 78.7%, followed closely by Nevada, Washington, and Utah, according to a ranking by SelfStorage using Zillow data.
Gas and housing prices continue to rise, leading to a 0.6% increase in the federal consumer price index for August and a 3.7% increase for the year, causing concerns about overall inflation and its impact on household budgets.
Miami and South Florida have experienced the highest increase in consumer prices among large U.S. urban areas, driven largely by the housing market, with home rents increasing by 15.3% and the cost of buying a home rising by 14.3%.
The median sales price for single-family homes in the state has increased by 271% since 2010, according to The Warren Group.
Home prices in California reached a 15-month high in August 2023, attributed to rising mortgage rates and a shortage of homes on the market, but the market is expected to improve in the last quarter of the year as interest rates ease, according to the California Association of Realtors.
U.S. home price growth increased to 2.5% year-over-year in July, with Miami, St. Louis, and Detroit driving the growth, while 11 states saw annual home price declines, according to CoreLogic's latest home price index data. Rising mortgage rates and a lack of inventory are putting pressure on potential homebuyers, and pending home sales have seen slight upticks, particularly in the West and South regions.
Home prices continued to rise in August due to low inventory and high mortgage rates, causing a drop in home sales, according to a report from the National Association of Realtors.
Home prices are estimated to have risen in July, despite higher mortgage rates.
US home prices reach a record high as the market rebounds, with prices increasing for a sixth consecutive month and offsetting last year's decline, according to S&P CoreLogic Case-Shiller data.
Home prices in Metro Phoenix are recovering, with a 1% increase from June to July, following a previous decline.
The US housing market is showing signs of hope for homebuyers as inventory increases and more sellers are lowering their asking prices, but high mortgage rates and rising prices are still impacting affordability.
China's new home prices rose slightly in September, ending a four-month decline, as developers accelerated launches to benefit from supportive measures, according to data from China Index Academy.
Australia's national house prices have rebounded to peak levels after a rapid decline, with factors such as tight rental markets and a housing shortage driving the growth, according to new data from PropTrack's Home Price Index report. The increase in buyer and seller confidence, along with a rise in choice in major capitals, has contributed to the recovery, with Sydney leading the way in price growth.
As the US housing market starts to cool down, homebuyers are being presented with a good opportunity as more homes see price reductions, according to Zillow, with 9.2% of listings having a price cut in the week ending September 16, a higher rate than in 2019.
Housing prices in nearly all U.S. counties are more unaffordable than ever before, with home prices continuing to rise while wages lag behind, making it increasingly difficult for average Americans to afford a home.
Inflation is impacting Americans across the country, with the Miami-Fort Lauderdale-West Palm Beach metro area experiencing the highest increase in consumer prices at 7.8%, followed by Denver, Atlanta, Seattle, and Detroit, according to WalletHub. Housing prices are a major driver of high inflation in cities like Miami, and while experts anticipate a gradual cool-down of prices, patience is needed.
Home prices in the U.S. rose by 3.7% in August, with New England states experiencing the largest growth, while Western states saw declines in home prices; California had the highest median sales price, and CoreLogic predicts a 3.4% annual home-price growth by August 2024.
Certain housing markets, including Allentown, Bethlehem, and Easton in Pennsylvania, have experienced significant price growth over the past four years, raising potential risks for buyers. Other markets such as Knoxville, Tennessee, Cape Coral and Fort Myers, Florida, Boise City, Idaho, and Portland and South Portland, Maine, have also seen substantial price increases driven by remote work during the pandemic. While it may not be a bad idea to buy in these areas, potential buyers should not expect significant price appreciation driving equity growth in the future.
Many young Americans are concerned about the difficulty of purchasing a home due to the high cost of real estate and stagnant salaries, particularly in cities experiencing intense gentrification, with Los Angeles, California seeing the largest increase in housing prices at 23.8% since September 2022, followed by San Diego, California and Richmond, California.
The housing market is currently experiencing high mortgage rates and rising home prices, making affordability worse than in 2008, according to Goldman Sachs analysis. Despite stronger consumer fundamentals, housing affordability has deteriorated beyond 2006 levels, and without an increase in home supply, unemployment, or a drop in mortgage rates, home prices are expected to continue climbing.
Home prices in Texas and Florida have surged, prompting locals to search for affordable homes in other states such as the Midwest for Texans and nearby states like North Carolina, Tennessee, Georgia, and South Carolina for Floridians.
SmartAsset utilized Zillow data to rank the top 10 U.S. cities with the highest projected home price increases in 2024, with Rio Grande City, Texas expected to see the biggest growth at 12.3%.
The rise in mortgage rates due to the Fed's battle against inflation has led to a historic increase in the cost of buying a home, resulting in a significant decline in home-buying demand and a doubling of the typical monthly mortgage payment.
Home prices rising alongside high mortgage rates have made the housing market the least affordable it has been since the early 2000s, with sellers reluctant to sell and buyers struggling with high spending on housing, leading to low existing-home sales volumes and a "lock-in" effect.
Home sales in the US dropped in September to the lowest level in 13 years due to rising interest rates and climbing home prices, making it unaffordable for many potential buyers. The low inventory of homes for sale pushed prices up, with the median price for existing homes reaching a record high of $394,300 last month.
The current housing market is resembling that of the 1980s, with high inflation, rising interest rates, and a boom of homebuyers coming of age, potentially leading to a similar "housing recession" where home sales stay low and prices stagnate; however, demographic changes, such as millennials reaching prime homebuying age, could support home prices despite rising mortgage rates.
Sales of newly built homes in the US surged in September, reaching their highest level since February 2022, as prospective homeowners turned to homebuilders due to a lack of inventory in resale homes.
New home sales in the United States rose significantly in September despite high mortgage rates and a tight housing inventory, driven by pent-up demand and the appeal of new construction options.
Sales of new U.S. single-family homes reached a 19-month high in September, with median house prices dropping by the most since 2009 due to discounts offered by builders, although the high mortgage rates could dampen future demand.
