Median Home Price Reached an All Time High in June

The median existing home price hit $440,600 in June, marking a new all-time high and the 36th straight month of year-over-year price increases. 

Meanwhile, NAR’s Existing Home Sales report shows sales activity moved in the opposite direction. Existing home sales fell 2.4% month over month even as the year-over-year comparison remained positive. 

Relative to a year ago, affordability has improved for many buyers, mainly because wage growth has outpaced the growth in home prices. 

How you frame this depends on who you’re talking to and where. 

The Record Price and What’s Driving It

Price growth and sales activity aren’t moving together right now. The median price kept climbing while the pace of sales slowed on a month-over-month basis, and inventory stayed tight enough to keep pushing the price up.

• Median existing-home price: $440,600, up 1.8% year over year from $432,700
• Existing-home sales: down 2.4% month over month to a 4.09 million seasonally adjusted annual rate, up 2.8% year over year
• Total housing inventory: 1.56 million units, down 0.6% from May
• Unsold inventory supply: 4.6 months, up from 4.5 months in May

NAR Chief Economist Dr. Lawrence Yun connects the monthly swings in sales directly to rate sensitivity, and points to job growth as the force keeping the market steady.

“The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions. However, job gains, more than half a million since the beginning of the year, will continue to provide support for the housing market.”

Dr. Yun also ties the record price directly to supply: 

“However, progress on long-term housing affordability could be hampered if inventory growth continues to stall. Without consistent gains in inventory, home prices can accelerate. It is critical to introduce more supply to the market to widen the opportunity for homeownership.”

What to Say to Sellers About Pricing Right Now

Homes are still moving fast, even with a record price attached. When a seller asks whether now’s the right time to list, days on market is the number that answers it fastest.

• Median time on market: 28 days, down from 29 days in May
• Up from 27 days a year ago

Price growth varies a lot by region, so the number a seller needs is their own market’s number, not the national headline.

• Northeast median price: $564,800, up 3.9% year over year
• Midwest median price: $346,600, up 2.7% year over year
• South median price: $377,700, up 0.9% year over year
• West median price: $633,600, up 0.9% year over year

Distressed sales are still historically low, so that’s a fast, reassuring answer if a seller brings up foreclosures or short sales as a market worry.

• Distressed sales: 2% of transactions, up from 1% in May
• Down from 3% a year ago

Pull the number for your own region before your next appointment. Pricing your client’s listing off the wrong regional number is an easy way to lose credibility.

What to Say to Buyers About Affordability

A record median price sounds like buyers are getting squeezed out, but the Housing Affordability Index shows buyers are in better shape than the record price suggests.

• Housing Affordability Index (national): 102.3, up from 95.5 a year ago
• Northeast affordability: up 4.5% year over year
• Midwest affordability: up 6.2% year over year
• South affordability: up 8.3% year over year
• West affordability: up 8.9% year over year

Mortgage rates help explain the improvement too. The average 30-year fixed mortgage rate was at 6.49% in June, which is up from 6.44% in May but down from 6.82% a year ago. 

First-time buyers pulled back slightly this month, which likely reflects some of that rate pressure.

• First-time buyers: 33% of June sales, down from 35% in May
• Up from 30% a year ago

Dr. Yun bases the affordability math on wage growth outpacing price growth, but doesn’t cite a specific figure. Wage growth naturally varies by industry and location, as well as price point. 

Know your local numbers on wage growth vs home price growth and share what you know with your buyers and sellers. And if your buyers are telling you something different about their experience (and their math), pay attention.