Home prices hit record high in May

The median price of an existing home that sold in May was $419,300, a record high and up 5.8 percent from last year, according to the National Association of Realtors.

This is the largest gain in prices since October 2022.

The National Association of Realtors noted that the mortgage payment for a typical home today is more than double what it was five years ago, a jump attributed to higher prices and higher interest rates that have raised mortgage rates. 

Home sales are not rising, perhaps because of the costs. Home prices are more than 50 percent higher than they were five years ago.

Despite hopes that home sales would recover this spring, the National Association of Realtors reported that sales were essentially flat, down 0.7 percent from April.

“Home sales refuse to recover,” said Lawrence Yun, chief economist at the NAR. “I thought we would see a recovery this spring. We are not seeing it.”

The U.S. housing market has been in a slump going back to 2022, when mortgage rates began to climb.

The average rate on a 30-year mortgage has hovered around 7 percent this year.

The Federal Reserve has not reduced interest rates with inflation cooling, but the economy continuing to grow.

Last week, the Fed said inflation has fallen further toward its target of 2 percent in recent months, signaling it may cut its benchmark interest rate once this year. The Fed previously projected as many as three cuts in 2024.