Housing Prices Hit All-Time High Despite Sales Slowing Down
You know, one of these days I’d love to have some positive news to share about the economy, but today is not that day. Data from the National Association of Realtors (NAR) revealed that housing sales slowed in June, even as home prices reached an all-time high.
AP reports that NAR’s data revealed that sales of existing houses fell 2.4% last month from May. Despite sales slowing down, the U.S. median sales price increased 1.8% in June from a year earlier to $440,600. This is the highest level since the NAR began tracking prices in 1999.
Housing prices have been rising annually for the last 36 months, while housing sales have been trending downward over the same period. Historically, an average of 5.2 million were sold each year. For the last three years, that number has hovered closer to 4 million. Sales probably aren’t being helped by the fact that the average interest rate on a 30-year mortgage currently ranges from 6.23% to 6.53%
Housing has been one of the biggest drivers of the U.S.’s ongoing cost-of-living crisis. Despite promising to bring prices down on the campaign trail, President Donald Trump has shown very little interest in pursuing legislation that would meaningfully address the issues. In fact, many of Trump’s actions have exacerbated the cost-of-living crisis.
The on-again, off-again war in Iran has had a significant impact on fuel and goods prices in the U.S., with housing prices also affected. As the war has heightened inflation expectations, the long-term bond yields lenders use to price home loans have risen, causing mortgage rates to climb.
Locally, I’ve been keeping up with housing prices in Arizona’s East Valley because I was curious about the price gap between renting and owning. Prices are falling in line with the national median, but many houses have been sitting on the market for a while. This has led to several significant price cuts on houses that have been sitting for months.
Interestingly, it seems like the housing market isn’t working for buyers or sellers. Prices are too high for buyers, so sellers are sitting on their unsold properties for months at a time. Even if you could get a loan, you still have to worry about housing upkeep, potential HOA fees, and all the other compounding costs that come with purchasing a home. At a time when folks are spending 40% of their pre-tax income on rent, buying a home seems less like a path to wealth and more like a financial burden.
“Without a doubt, the affordability is a major challenge for people who want to become homeowners, which is the reason why we need more supply,” Lawrence Yun, NAR’s chief economist, told AP.
I’ll give some credit to Congress, which recently passed a bipartisan housing bill that has some of the most robust housing reforms in decades. While Trump has said he will refuse to sign any bill until the deeply unpopular SAVE America Act passes in Congress, the bill will become law this Friday, with or without Trump’s signature, due to a law in the Constitution. That is, unless Trump decides to veto the bill.
The bill is popular in Congress, among homebuilders, housing advocates, and the general public. It’s honestly the easiest layup Trump could give Republicans ahead of the midterms, which means I won’t be surprised if Trump manages to fumble the bag at the last minute.
SEE ALSO:
HUD Proposes Rule That Would Add Time Limits To Section 8 Vouchers
Poll Finds Nearly Half Of Americans Struggle To Afford Basic Needs
Inflation Hit Highest 1 Month Spike In 4 Years Due To Iran War
Housing Prices Hit All-Time High Despite Sales Slowing Down was originally published on newsone.com
