US home prices just smashed another record high as affordability crisis deepens
ResiClub co-founder and editor-in-chief Lance Lambert discusses the U.S. housing affordability crisis on 'Making Money.'
The cost of buying a new house just hit a fresh record, even as mortgage rates dipped to the lowest level in three months, according to a new report.
Findings from Redfin show the median U.S. home sale price soared to $394,000 during the four weeks ended June 9 – a 4.4% increase from a year earlier.
The monthly mortgage payment at that price, when accounting for the 6.99% median interest rate for a 30-year mortgage, is now $2,829. That is roughly $30 shy of April's record.
Housing costs are unlikely to spiral any higher thanks to a recent drop in mortgage rates, which fell after the government reported that inflation cooled in May. However, they may not go much lower, either.
MORTGAGE CALCULATOR: SEE HOW MUCH HIGHER RATES COULD COST YOU
A home for sale sign in front of a house in Huntington Beach. (Allen J. Schaben / Los Angeles Times via Getty Images / Getty Images)
«The latest inflation report is good for homebuyers because it has already sent mortgage rates down, though this week’s Fed meeting will temper mortgage-rate declines,» said Chen Zhao, economic research lead at Redfin. «But on the other side of the coin, if lower mortgage rates bring back more demand than supply, that could erase the possibility that home-price growth softens, and push prices up even further.»
There are a number of driving forces behind the affordability crisis.
Years of underbuilding fueled a shortage of homes in the country, a problem that was later exacerbated by the rapid rise in mortgage rates and expensive construction materials.
Higher mortgage rates over the past three years have also created a «golden
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