Home prices cooled only marginally in June, falling just 1 percent from their peak last year, according to a new report.
The report from real estate brokerage Redfin found that the typical home is selling for $383,000, about $4,000 lower than its record high last June, as a lack of homes for sale has kept prices from falling lower.
This is also the smallest year-over-year drop in four months, the report found.
A lack of availability is sustaining the high prices, the report notes, with new listings falling 27 percent from a year earlier during the four weeks ending June 25. This is the biggest drop since the beginning of the pandemic.
Persistently high mortgage rates are also hurting the market as buyers who might be interested in moving are tied down by the low rate they secured during the pandemic-era housing boom.
The 30-year fixed-rate mortgage ticked up slightly this week to 6.71 percent and has been hovering above 6 percent for months.
Yet some economists are encouraged by home sales numbers even as mortgage rates higher than 6 percent seem to be the new normal for homebuyers.
“Mortgage rates have hovered in the six to seven percent range for over six months and, despite affordability headwinds, homebuyers have adjusted and driven new home sales to its highest level in more than a year,” Freddie Mac Chief Economist Sam Khater said in a statement.
New home sales surged by 12.2 percent in May to a seasonally adjusted annual rate of 763,000 units. Sales were 20 percent higher than they were a year ago.
“New home sales have rebounded more robustly than the resale market due to a marginally greater supply of new construction,” he continued. “The improved demand has led to a firming of prices, which have now increased for several months in a row.”