According to the National Association of Realtors, the median price of a previously owned US home climbed again in May, jumping 5.8% compared to a year ago.
That now puts the price tag at $419,300, the highest price for a previously owned home ever recorded by the NAR.
“Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers,” NAR’s chief economist Lawrence Yun said in a release. “Still, first-time buyers in the market understand the long-term benefits of owning.”
The report from the NAR comes as mortgage rates remain sky-high, and economists don’t expect them to fall below 6% this year.
But the perfect storm doesn’t end there, as high prices and mortgage rates have also been met with a low supply of homes for sale, creating a perfect storm that has made it almost impossible for many to buy a house.
Zillow gives more insight into the difficulty of buying a home, as it found that for a median-income household to afford a monthly mortgage payment on the typical US home, it would need to put down $127,000 as a down payment.
That would mean that the average US worker would need to save about two years of their salary before they can buy a home.
But while things seem worse than ever, there have been some improvements in recent months, as the NAR reported that housing inventory has increased this year, with 1.28 million units available in May, up 6.7% from April and 18.5% from a year ago.
Yun has highlighted for months that many are hesitant to sell because of their attachment to the low mortgage rates they acquired before the Federal Reserve began its inflation-fighting rate hikes in 2022.
However, the signs are starting to show that homeowners may be cutting ties as the number of houses on the market begins to grow.