Despite home buyer demand beginning to fade across the U.S., with mortgage rates soaring, prices have continued to climb across nearly all of the country, with demand continuing to outpace supply, according to a new report.
The National Association of Realtors announced on Thursday that in 184 of the 185 metro areas it tracks, the median sale price was more expensive than last year's second quarter.
The only metro area that saw a decline in prices was Trenton, New Jersey, where home costs dipped 0.7%.
Home prices have hit new highs in recent months, as 80% of the 185 metro areas saw more than 10% increases in median prices, up from 70% last quarter, the NAR reported.
One of the main issues seems to be availability, as the supply for home buying hopefuls is currently at record low levels, the Wall Street Journal reported.
The NAR reported that the median cost for a single-family existing home is $413,500, a new record. In addition, the price increased by 14.2% compared to a year ago in the second quarter.
The market continues to get worse, too, due to potential sellers putting a pause on selling over the last two years because they don't want to buy in the current market, the Journal reported.
With supply chain issues and labor shortages still playing a factor, new home construction has also slowed across the country.
However, there are some signs that price growth is slowing in some markets, and the Journal reported that economists think the national price growth will slow significantly by 2023. Lawrence Yun, NAR's chief economist, shared that the market can't stay where it's at with home prices outpacing average income.
"Home prices have increased at a pace that far exceeds wage gains, especially for low- and middle-income workers," Yun said to the Journal.
The bottom line is that rising home prices and higher mortgage rates have made homeownership less affordable for many of the population.
During an earnings call this month, Rich Barton, the chief executive for Zillow Group, stressed that it is a difficult time to buy.
"Affordability has become very challenging for buyers," Barton said. "Across the industry, we are seeing price growth meaningfully soften on pending sales."
To put it into perspective, NAR reported that the typical monthly mortgage payment for a single-family home in the second quarter was $1,841. A year ago, the same home's monthly payment was $1,229, over $600 less.