Data has it that the price of a median existing home for all housing types has gone a two-percent increase from July last year up to the current year. A significant challenge for aspiring homeowners who want to have a median existing home for their family.
Why Do The Prices of Median Existing Homes Continue To Rise?
For the record, having a median existing home for some is already a luxury, but with the continuous surge of its price in the housing market, this might be way out of budget for hopeful homeowners. A report found that housing inventory and home sales crucially declined in July this year compared to a year prior. Now, what does this connote? It means that the price of existing homes will continue to increase and it will become a tough market for home buyers.
But these are not the only factors that made the price of the median existing homes climb from $399,000 in July last year to $406,700 this year. High-interest rates are also another factor to blame for the median existing homes dilemma. According to data, the average thirty-year fixed-rate mortgage rate is set at 7.23% for the week of August 24, however, historical data showed that last year, the average thirty-year fixed-rate mortgage was at 5.55%. That notable gap already affects the wallets of many home buyers.
As a result, home buyers will opt to reconsider selling their existing homes due to the fact that they will need to take on a new mortgage at a much higher rate. End point? Fewer existing homes are available in the housing market for soon-to-be buyers who are prepared to put in offers.
Will The Prices of Median Existing Homes Ever Come Back Down?
There’s really no one hundred percent certain answer for that as it is hard to predict the prices of existing homes in several months or a few years. However, a recent report suggested that there will be a hike in existing home prices of 6.5% from July 2023 through July 2024. And as long as there is a limited housing inventory, existing home prices will constantly rise.
The solution perhaps lies in the home mortgage rates. Maybe, if these rates would just lower over the coming months, a number of existing homeowners might consider selling their existing homes in the market- which in turn, would help the inventory, decrease competition, and move the existing home prices down slightly.