Even as mortgage rates reach new highs, home prices are setting historic records in some markets, according to CNBC. Home prices rose 0.7% nationally from April to May at a seasonally adjusted rate and posted a 0.1% increase year-over-year. Prices began to fall last summer and continued to decelerate until January of this year, when demand surged despite tight supply.
According to housing experts such as Robert Reffkin, CEO of Compass Real Estate, buyers have simply gotten used to higher rates, and even low supply isn’t enough to deter them.
Home prices are still weaker in the West and in many of the cities deemed pandemic “boom towns,” which had an influx of remote workers finding new homes during the earlier days of Covid.
But those prices are starting to firm up. Homes in San Jose, California, lost 10% of their value last year, but inventory is starting to fall again, and prices there are now reheating. They rose 1.4% in May, the second largest month-to-month increase of any market on a seasonally adjusted basis. San Diego, Los Angeles, San Francisco and Seattle also saw price growth in May, as well.
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