Housing prices continued to rise in June for the fifth month in a row.

U.S. Home Prices Rise‍ Again, Approaching All-Time High

In June, U.S. home prices experienced their fifth consecutive monthly increase, nearing their all-time high from a year ago.

According to the S&P CoreLogic Case-Shiller US National Home Price Index, housing costs rose 0.7 percent from May, rebounding ​from ‌a 0.4 percent⁣ drop in April. This report ​was published on Aug. 30.

A‌ recent surge in the 30-year mortgage rate​ has created challenges for potential homebuyers.

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The average 30-year mortgage rate was at 7.54 percent⁤ on Aug.⁤ 28, according to Bankrate, down from 7.62‍ percent the week ⁤before and near its highest level⁤ in almost two decades.

Buyers Pushed Out of ​Market

The combination of higher mortgage payments and historically low‌ housing stock has forced many households out of the market for home purchases.

Andy Walden, vice president of enterprise research and strategy at Black Knight, told CNN last week, “To put today’s affordability levels in perspective, it would take some combination of up to a 28% decline in home prices, a more than 4% reduction⁣ in⁢ 30-year mortgage rates, or up to a 60% growth in median household incomes to bring home affordability​ back to its 25-year ‌average.”

According to Black Knight, 38.6 percent of median household income is required to make⁤ a monthly payment on the average home purchase, the worst measure since 1984.

Since the beginning of the year, U.S. home prices have risen 4.7 percent, slightly above the median annual increase in over 35 years of recorded data, as reported by ​the S&P.

Craig Lazzara, Managing Director at S&P ​DJI, stated, “The recovery⁤ in home prices is broadly based. Our National Composite rose by 0.9%⁢ in June, and it now stands only -0.02% below its all-time peak from exactly one year ago.”

While home prices on the East Coast and in the Midwest have risen 1.6 and 2.8 percent, respectively, those in the West have experienced a year-over-year average decline of 5.9 percent.

For ⁣example,⁢ in June, Atlanta saw price⁤ gains of 2.1 percent, New York jumped 3.4 percent, and Cleveland rose ⁤4.1 percent. On ⁣the other hand,⁤ San Francisco fell 9.7 percent, Seattle lost 8.8 percent, and ‌Las Vegas dropped ​8.2 percent.

Colin‌ O’Leary, a​ salesperson at Berkshire Hathaway HomeServices ⁢Fillmore Real Estate,‌ told⁤ The Epoch ‌Times, “The S&P CoreLogic Case-Shiller U.S. National Home Price Index for June ‍showed mixed results. As ‍buyers adjust to higher interest rates, home prices are continuing to increase in many markets due to a lack of listing ⁣inventory.”

As a result, home purchase applications have dropped by 7 percent annually, reaching their lowest level in nearly 30 ​years during the week ending Aug. 18, according to Redfin’s Homebuyer Demand Index.

Low Inventory

“Low housing supply is keeping home ‍prices high in many markets, adding to ‌the affordability hurdles buyers are facing,” said Joel Kan, MBA’s vice ​president and⁣ deputy ​chief economist.

Many homeowners are currently unwilling to⁣ sell their homes at existing mortgage rates⁣ after purchasing them at ultra-low average rates of 3‌ to ‍4 percent.

This factor‍ has ​exacerbated the existing housing shortage, pushing prices even higher for potential homebuyers.

Hannah Jones, an economic data analyst at Realtor.com, stated, “Many existing homeowners remain ‍on the sidelines of the market, content to stay put as mortgage rates reach 20-year highs. As a result, home shoppers are ⁤seeing ​fewer existing homes for sale and facing more competition for the homes available.”

To⁢ address the lack‌ of existing housing, new constructions are⁢ needed ‌to fill the gap, which saw another increase in July.

Ms. Jones expressed caution as⁣ affordability issues continue to weaken buyer demand, stating, “Limited home⁣ inventory, still-high⁤ prices, and elevated mortgage rates meant that both new and existing ⁢home sales fell in June, though ​new home sales remained well above the pre-pandemic levels.”