By Kristin Myers, Editor-in-Chief

ICYMI: Home Prices Rise as Housing Market Cools

In case you missed it, while the red hot housing market cools down, home prices continue to rise. Median home prices hit a record high of $407,600 in May, the first time median home prices have risen over $400,000 and an increase of 14.8% over last year.

These higher home prices are causing buyers to bow out of the market, as sales of single-family homes dropped by 3.4%. The decrease in May was the fourth straight month of declines, dropping to the lowest level since 2019, before the pandemic hit.

Fewer homes are on the market compared to last year, and the supply doesn't seem like it will get better as new home construction dropped 14.4% last month from the month prior. Low inventory has kept home prices high as Americans' demand for homes increased throughout the pandemic.

But that interest is waning as rising mortgage rates weigh on the housing market. Home loans have gotten increasingly expensive, thanks to the rate hikes from the Federal Reserve in its fight against inflation. Currently, the rate on a 30-year fixed mortgage is 5.98%, the highest since November 2008 and almost double what it was last year, according to data from the Mortgage Bankers Association.

With home prices so high, you might find yourself tempted to take a "wait and see" approach to buying a new home. But sadly, experts say that if you are waiting for home prices to drop, you'll probably be waiting a while. And with mortgage rates likely to increase even more as the Fed continues to hike interest rates, you could end up paying more not only for the home, but also for the loan.

-Kristin

Editors' Picks

Buying a House During a Recession (The Balance)

How Subject-To Loans Work in Real Estate (The Balance)

When Will Interest Rates Go Up? (The Balance)

How to Tell When Refinancing Makes Sense (The Balance)

How Long Do You Have Health Insurance After Leaving a Job? (The Balance)

History of Recessions in the United States (The Balance)

Can You Use PayPal on Amazon? (The Balance)

Off the Charts

Rising prices of barbecue meats, such as chicken wings, and propane fuel means you can expect your Fourth of July celebration to cost nearly 7% more this year, according to The Balance's analysis of the latest inflation data from the Bureau of Labor Statistics' Consumer Price Index (CPI), and USDA MarketNews Retail data. Chicken wings had the largest price hike among barbecue essentials on the list. Wings cost an average of $4 per pound now—a price increase of almost 54%, which makes them 1.5 times more expensive compared to last year.