Reports Reveal How Much Buyers Will Shell Out on a Home, and It’s Not Great

published May 31, 2024
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For Sale Sign in Front Yard of House
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Bad news if you’re looking to buy a home: Despite the fact that a home construction boom is driving up the housing supply across the country, the median cost of an existing home is still way up compared to last year. In fact, the median cost of an existing home is up 5.7% year over year as of April, at $407,600, according to a recent report from Zillow.

Another report from Redfin confirms that high housing costs are a nagging reality that aren’t just going to disappear overnight. The real estate group reports that the median home-sale price hit $387,00, up 4% year over year in the four weeks ending on May 19. 

Although the exact numbers differ, the reports both point to a real problem for would-be buyers — the high cost of housing and stubbornly high interest rates (April 2024 represented an all-time high weekly average mortgage rate, and as of May 23, the weekly average mortgage rate was 7.02%) — are making the housing market unaffordable for many people.

The numbers don’t lie: Zillow’s report says that in April, existing home sales fell by 1.9%, while Redfin says that pending home sales were down 4.2% year over year as of May 19.

But will home prices stay this high forever? And what about mortgage rates? Is there any hope on the horizon? 

There is, but it’s not coming tomorrow. 

“Home prices reaching a record high for the month of April is very good news for homeowners,” Lawrence Yun, chief economist for the Realtors association, said to CNBC. “However, the pace of price increases should taper off since more housing inventory is becoming available.”

As for mortgage rates, experts widely agree that buyers won’t see relief until the Fed cuts interest rates, which they’ve so far held off on doing in their fight against inflation. 

However, not all housing markets are the same, nor is the housing market as tough for everyone across the board. CNBC reports, for example, that while the median price of a home in the Northeast region is up 8.5%, and in the West 9.3%, in the South it’s up 3.7% — well below the national average. 

So if you want to buy somewhere, you might consider moving to Southern pastures — another recent Zillow report found that there are several markets in Texas and Florida that are much more buyer-friendly than others — so consider looking in San Antonio, Miami, New Orleans, Orlando, Austin, and Houston.