Record Home Prices and High Interest Rates Continue to Put Pressure on Prospective Buyers in April

In April, home prices surged to record highs, reaching a median price of $407,600. This marks the tenth consecutive month of year-over-year price growth, putting pressure on prospective buyers who are already facing high interest rates. Despite a relatively flat total number of existing home sales in April, prices continued to rise.

The National Association of Realtors reported that the upper-end market is experiencing significant gains due to an increase in supply. However, overall home affordability has declined since the pandemic, with soaring mortgage rates and high property prices driven by supply shortages. These trends have made renting more affordable than buying in most major cities, benefiting landlords.

According to Lawrence Yun, the NAR’s chief economist, indicators and consumer prices remain high despite the Federal Reserve’s efforts to combat inflation with increased interest rates. The Fed governor, Christopher Waller, suggested that interest rates will not be lowered until signs of cooling inflation have been observed for several more months.