The Median Home Sale Price in July Was $406,700. Will Prices Ever Come Back Down?
A recent National Association of Realtors report showed that the median existing-home price for all housing types in July 2023 was $406,700. This was an increase of 1.9% from July 2022, when the median existing-home price was $399,000. For many, this is way out of budget.
If it feels as if home prices have continued to climb, you're not imagining it. Low inventory continues to support higher home prices. According to the National Association of Realtors, the total housing inventory at the end of July 2023 was down 14.6% from one year ago. For hopeful home buyers, it continues to be a tough market. Keep reading to discover why home prices are still high nationwide.
It's a challenging market for buyers
The dream of owning a home may feel out of reach for hopeful homeowners. Data from the National Association of Realtors shows that year-over-year home sales decreased 16.6% from one year ago. This is likely because high interest rates, low housing inventory, and increased competition make the home-buying process challenging and more expensive.
According to Freddie Mac, the average 30-year fixed-rate mortgage rate is 7.23% for the week of Aug. 24, 2023. But historical data shows that one year prior, the average 30-year fixed-rate mortgage was 5.55%. That's a significant difference that impacts the wallets of hopeful buyers.
Many current homeowners are staying put, even if they've considered selling their homes because they don't want to sell and take on a new mortgage at a much higher rate. This is a big reason why fewer homes are available for soon-to-be buyers ready to put in offers.
The median home sales price was $406,700 in July 2023
A recent National Association of Realtors report shows that the median existing-home price increased 1.9% from July 2022, when the median existing-home price was $399,000. For many, this is way out of budget.
If you've been saving up to buy a home, you may wonder if home prices will continue to rise. It's hard to know what the housing market will look like in several months or a few years. A recent report from Zillow suggests that home prices are predicted to rise 6.5% from July 2023 through July 2024. That's likely unwelcome news to anyone hoping to get a place of their own.
Home prices could rise, especially if there continues to be a limited housing inventory. But if home mortgage rates were to lower over the coming months, more current homeowners might decide to put their homes on the market -- which would help to increase inventory, reduce competition, and drive prices down slightly. Let's hope that's the case.
What to do if you want to buy a home soon
At this point, all we can do is speculate what the housing market might look like in the future. Time will tell what the market will look like next year. If you're planning to buy a home soon and are feeling anxious, your best bet is to focus on what you can control to reduce your stress.
You can't control market conditions or interest rates. But you can focus on working to meet your saving goals. If you want to buy a home next year, you can continue to stash money in a high-yield savings account so you feel more confident that you have enough cash to cover a down payment and closing costs when the time comes to purchase a house.
The more money you save and the longer you let your money sit in a savings account, the more interest you'll earn -- getting you closer to reaching your personal finance goals. Don't give up! While the current market isn't favorable toward buyers, that could change. If you hope to buy for the first time, check out these first-time home buyer tips to better prepare.
Looking for help buying your first home? We can help. Check out your options and start your journey today!
This article was written by Natasha Gabrielle from The Motley Fool and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to firstname.lastname@example.org.