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- Home prices hit a new-all-time high across the US in June as the shortage in inventory drags on.
- Prices reached fresh peaks in 30 out of 50 housing markets tracked by Black Knight, the firm said in a new report.
- Meanwhile, the housing market is short around 3.8 million units, per an estimate from Freddie Mac.
Home prices notched a new record this summer in the majority of the US, reflecting a massive shortage in inventory that's spawned an increasingly unaffordable housing market.
The Black Knight Home Prices Index hit a new all-time-high in June, with home prices hitting a new record in 30 out of 50 housing markets tracked by the analytics firm, it said in a report on Monday. Across all markets, prices grew 0.8% year-per-year in June, surging from just a 0.2% increase reported in May.
"We've been noting for some months that the recent rate of home prices gains would have a lagging, but significant impact on the rate of appreciation," Black Knight vice president of enterprise research Andy Walden said in a statement. "June marked that inflection point."
The surge in prices is partly attributed to the inventory glut that's plagued the housing market, as high mortgage rates have deterred existing homeowners from listing their properties for sale. That's created a supply-demand imbalance that's propped up home prices for the past year, with seemingly "no end in sight" for that trend, the firm added.
The average 30-year fixed mortgage rate inched higher to 6.9% the last week, according to Freddie Mac. Meanwhile, the market is estimated to be short around 3.8 million units.
Home builders have stepped up to fill the hole in supply, but affordability is unlikely to improve until mortgage rates ease more significantly, experts say, though that likely isn't happening anytime soon. Mortgage rates are influenced by real interest rates in the economy, which markets expect to stay elevated all year as the Fed continues to monitor above-target inflation.
Rates will need to pull back to the 5% range to flood the housing market with new inventory, Compass's CEO forecasted. Still, rates are expected to ease to just 6% by year-end, according to Redfin's deputy chief economist.