The cost of buying a home has reached an all-time high

It’s more expensive than ever to buy a home in the US, according to for a new report from Redfin real estate.

The median home price hit a record $383,725 during the four-week period ending April 21. That represents a 5.2% increase from the previous year, Redfin found, one of the biggest jumps in home prices since October 2022.

The average 30-year fixed mortgage rate hit 7.1 percent this week, the highest since November 2023. Mortgage rates briefly fell late last year after the Federal Reserve signaled it would cut interest rates this year, but have been rising steadily as strong economic data has extended the deadline for initial rate cuts.

The average monthly housing payment also jumped to a record $2,843, a 13% increase over the same period last year.

Chen Zhao, economic research lead at Redfin, said potential buyers should “accept that this year is probably not the time to find a dream deal.”

“Price growth could cool slightly in the coming months if mortgage rates remain high or if rates fall slightly – but overall housing costs are expected to remain high for the foreseeable future,” Zhao said.

The Fed is not expected to start cutting interest rates until September, according to the CME Fedwatch Toolwhich means borrowing costs, including mortgage rates, are likely to remain high for some time.

Housing costs are one of the indices driving stubbornly sticky inflation, accounting for more than 60 percent of annual “core” inflation, according to the latest consumer price index (CPI). Although inflation fell to 3.5% year-on-year in March from its peak of 9% in June 2022, the central bank is not confident that it is on a smooth path to achieving its 2% target and expects Interest rates are expected to remain in the current range of 5.25. percent to 5.5 percent when it meets next week.

To overcome high prices and borrowing costs, the rate of all-cash home purchases is at a near-record high, a recent Redfin report concluded. More than 1 in 3 homes were purchased for cash in February, and the average down payment jumped to $55,640, a 24.1% increase from the previous year.

But most buyers can’t make a cash offer or offer a larger down payment, which Zhao previously said is “creating a reality where, in many places, wealthy Americans are the only ones who can afford homes.”

Low housing supply has also contributed to rising house prices. Although Redfin recently reported that a near-record number of apartments are under construction, which will ultimately drive down housing prices, there is still strong demand for a smaller number of homes.

“My advice to sellers is to set a fair price for your home. Although sellers are making a lot of money right now, they must price competitively to attract buyers early on and avoid having to lower their prices as stubbornly high mortgage rates put a strain on purchasing budgets,” Zhao said.