It is no secret that the U.S. housing market has been in a deep sales slump for over a year. Rapidly rising interest rates have not only deterred many buyers from entering the market, they have also led to many homeowners deciding not to sell. So what about home prices? Interestingly, we have seen national home prices dip slightly over the past few months. In fact, we saw 5 consecutive months of slight price declines between 1.3% – 3% during the first half of the year. However, this downward trend reversed in the month of July when national home prices actually rose by 1.9%. Could this mean that home prices have officially bottomed out?
Where are home prices now?
According to the National Association of Realtors® (NAR), the national median sales price for a home rose to $406,700 last month. This marked the first annual increase since January and is also the second consecutive month with the median price above $400,000. For perspective, the national median home sales price is currently at an astounding 45% higher than it was in 2019.
Lawrence Yun, chief economist at the NAR, was recently quoted as follows: “At least when it comes to home prices, it looks like the housing recession is already over.” In fact, Yun went to say that there is a greater chance for home prices to rise in the coming months than there is for a decline.
The shortage of homes for sale has certainly kept the market competitive and home prices stable. According to data from the NAR, about 35% of homes sold in July fetched more than their list price. Although still low, the inventory of homes for sale has been ticking up slightly. This added supply combined with decreasing buyer demand as mortgage rates continue their rise could put some downward pressure on home prices. Of course, in markets such as South Florida, we continue to see a strong demand. In particular, this demand is coming from buyers moving into The Sunshine State from other states. Assuming that the 30-year mortgage rate remains at or above 7%, we expect to see a slower housing market in the fall.
Are you looking to buy or sell a home in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, don’t forget to download the free Florida Home Search app for your smartphone or tablet. This will allow you to have the power of the South Florida MLS right in your pocket!