The median price for an existing home has reached a record high of US$391,200. Soaring prices and rising interest rates have brought about a decline in sales.
In April 2022, the average house price in the U.S. skyrocketed to a record US$391,200. With more prospective buyers sidelined by high prices and increasing interest rates, the market is experiencing a drop in sales.
The U.S. housing market has started to falter after two years of booming sales fueled by record-low mortgage interest rates and the surge in demand for more spacious homes during the Covid-19 pandemic. A rise in interest rates over the last months has affected affordability and slowed the market.
In April, existing home sales were down 2.4% compared to March.
“Higher home prices and sharply higher mortgage rates have reduced buyer activity. We are moving back to pre-pandemic sales activity,” said Lawrence Yun, NAR’s chief economist.
Home sales tend to peak in the spring. According to NAR, 40% of deals are closed between March and June.
The strong demand has spurred construction activity, which has however been hampered by logistical delays and labor shortages.
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