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Published: Jun 14, 2024 4 min read
An arrow breaking through the roof of a house.
Money; Getty Images

The housing market is somehow both hot and cold at the moment, with home prices reaching a record high at the same time sales have dropped to a near-decade low.

A confluence of factors is causing a standoff in the housing market this spring. Many homeowners are reluctant to sell because they feel locked into sub-4% mortgage rates they snagged years ago — and which they’d have to swap for rates around 7% if they bought another house now.

Aspiring homebuyers, meanwhile, view the market as overpriced and out of reach, largely because of those same high mortgage rates. Their caution, mixed with general unaffordability, is resulting in plunging sales.

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More specifically, here are some key data points — from recent Redfin and Zillow reports — showing how the market is faring lately, and why there’s reason for frustration among buyers and sellers (and realtors) alike:

  • The median U.S. home sales price reached an all-time high of $439,716 in May, up 5.1% year over year.
  • The typical mortgage payment for a homebuyer in May was $2,829, down slightly from the record high the month before.
  • New home listings are up 13% compared to a year ago. However, inventory is still low in the grand scheme, down 34% versus pre-pandemic levels.
  • Sellers seem to be testing the waters with astronomical asking prices that scare off buyers: 23.9% of homes for sale in May got a price cut, which is the highest share for the month in at least six years.
  • U.S. home sales totaled 407,959 in May, the third-lowest tally in the last decade, during what’s usually a hot month for real estate.

Where home values are rising (and falling) most

The market doesn’t clearly favor buyers or sellers right now. In its May report, Zillow stated that the environment “is becoming a bit friendlier for buyers and is headed toward ‘neutral’ territory, but sellers still hold a slight advantage.”

"Buyers are sitting in a bittersweet market right now," Ralph McLaughlin, a Realtor.com senior economist, said in a report recently. "They have the most options since before the COVID-19 pandemic but are stymied because of rising prices and stubbornly high mortgage rates.”

If there’s one group that’s content with the market, it’s homeowners who are happy with where they’re living and have no inclination to sell. After years of price growth, owners are enjoying record high home equity, which can be tapped into via a home equity loan or line of credit if needed.

Zillow reports that home values are up year over year in 46 out of the 50 biggest metropolitan areas. Here’s where they’ve risen the most in the last 12 months:

  • San Jose, California: +12.7%
  • Hartford, Connecticut: +11.6%
  • San Diego, California: +11.1%
  • Los Angeles, California: +8.9%
  • Boston, Massachusetts: +8.3%

And here’s where home prices are down the most in the last 12 months:

  • New Orleans, Louisiana: -5.9%
  • Austin, Texas: -4.1%
  • San Antonio, Texas: -2.2%
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