Home prices in the US have reached an all-time high, despite sales numbers hitting a nine-month low. The median price of an existing home sold last month was $435,300, surpassing the previous record set in June 2024.
The housing market is experiencing a stark divide between buyers and sellers. While many people are struggling to afford homes due to rising mortgage rates, some individuals have enough savings to take advantage of high prices. This has led to a surge in luxury home sales, with those priced above $1 million increasing by 14% over the past year.
For first-time and middle-income buyers, however, the market is becoming increasingly unaffordable. The median price is now 48% higher than it was five years ago, with many potential buyers unable to secure a mortgage due to high interest rates.
Mortgage rates are also discouraging sellers from putting their homes on the market, as they lock in lower rates only when they have significant housing equity. Lower interest rates would likely increase demand and drive up prices even further, making it difficult for first-time homebuyers to compete.
Not all regions are experiencing high home prices. In 30 out of 50 metros, prices actually fell, with the largest declines in Washington D.C., Austin, Texas, and San Diego.
New-home sales have also seen a decline, partly due to weak buyer demand resulting from challenging affordability conditions. However, new homes are now becoming more affordable, with the median sales price being nearly $40,000 lower than that of existing single-family homes.
Source: https://www.npr.org/2025/07/26/nx-s1-5478757/home-price-record-mortgage-rates