Robert Galbraith/ Reuters
- Home prices got close to notching a new record last month, per Redfin data.
- The median sale price clocked in at $426,056 in June, just 1.5% below the all-time-high.
- That's as the inventory of available homes for sale dropped to a record low last month.
Home prices in the US flirted with record highs last month, thanks to the shortage in housing supply that's crushing affordability for many buyers.
The median home sales price clocked in at $426,056 in June, posting just a 0.6% decline from the median sales price recorded the previous month, according to Redfin data.
It marks the slowest decline in home prices the housing market has seen in five months. Meanwhile, home prices hovered just 1.5% below the all-time-high median sales price of $432,397 recorded in May of 2022.
That's largely due to the dearth of inventory of homes for sale, which has kept prices propped up over the past year. Available homes on the market fell to an all-time-low of 1,318,154 in June, representing a 15% decline from the same period in 2022. New listings also plunged to 450,000, representing a 30.6% decline from levels last year.
The housing market now only has around 1.8 months of housing supply available, Redfin data shows, the scarcest supply has been since the pandemic.
Buyers, meanwhile, have grown used to elevated mortgage rates, which has exacerbated the inventory shortage. Demand picked up slightly in June, with mortgage applications increasing in three of four weeks during the month, according to the Mortgage Bankers Association.
"Homebuyer demand has bottomed out," Redfin chief economist Daryl Fairweather said in a statement on Monday. "High rates are still giving a lot of buyers pause, but the sticker shock is no longer as severe as it was when rates skyrocketed last year. With home prices back near record highs, buyers are also less worried that they'll buy a house that'll plunge in value."
High mortgage rates have put housing market in a state of limbo over the past last year, with buyers and sellers sidelined as the cost of borrowing remains high. Until now, buyers have been mostly deterred by high mortgage rates, causing demand to fall. Homeowners, meanwhile, have been discouraged from listing their properties for sale, as many are looking to keep their low rates that they locked in during the last decade and a half of historically low interest rates.
Those trends have created an affordability barrier for buyers, which experts say is unlikely to get better until mortgage rates drop back down.
Rates will likely need to fall back to the 5% range to see more inventory hit the market, according to Compass CEO Robert Reffkin. Meanwhile, the average rate on the 30-year fixed mortgage inched closer to 7% in the last week, per Freddie Mac data.