According to the latest report from Redfin, the median American home-sale price hit a record $383,725 during the four weeks ending April 21, an increase from 5.2 percent from a year earlier, one of the biggest jumps since October 2022. The report comes as the average weekly mortgage rate reached 7.1 percent, the highest level since November 2023, keeping the financial squeeze on both homeowners considering selling and buyers considering making a purchase. For over a decade, until the onset of the pandemic, mortgage rates were at historic lows. The current high-rate environment dissuades potential sellers from listing their home. For instance, a person who locked in a rate of 3.5 percent on a $400,000 home on a standard 30-year loan would now face a monthly payment increase of approximately $892 if they were to refinance at the current rate of 7.1 percent. For prospective buyers, the combination of fewer homes on the market and higher rates diminishes purchasing power, leading to increased home prices. Housing experts have remained consistent in tying the U.S. housing shortage (between 4 to 7 million) to higher home prices. However, the Redfin report finds that home prices are soaring even despite more inventory than during 2023. “My advice to sellers is to price your home fairly. Even though sellers are getting top dollar at the moment, they should price competitively to attract buyers from the start and avoid having to drop their price as stubbornly high mortgage rates eat into buying budgets,” said Redfin Economic Research Lead Chen Zhao. “My advice for serious buyers who can afford today’s costs is to shop for your dream home and accept that this year is probably not the time to find a dream deal,” Zhao added. “Price growth may cool slightly in the coming months if mortgage rates stay high or rates might fall slightly—but overall housing costs are likely to remain elevated for the foreseeable future.” At the start of the year, analysts predicted multiple rate cuts by the Federal Reserve. However, amid multiple consecutive months of government reports showing inflation surging again, hopes for a series of rate cuts have all but disappeared.U.S. home prices have soared to record highs, new housing data shows.
