The housing market is reaching record highs despite rising interest rates, indicating an affordability crisis and a unsustainable situation.

Median home sales price is nearing its peak set in 2022, with prices 4.5% higher year-over-year.

Monthly housing payments have also hit a record high of $2,747, an 11% increase from last year.

Rising interest rates are affecting demand, with mortgage purchase applications down 23% and home-buying demand down 6% year-over-year.

Pending sales, an indicator of future demand, have also seen a decline, signaling the impact of high interest rates on the market.

Despite the drop in demand, new listings are surging, potentially due to higher prices pushing more expensive homes onto the market.

Active listings of homes for sale are up 8% year-over-year.

Months of supply, a measure of inventory, is still below the 6 months considered a buyer’s market, but has increased to 3.2 months.

Price cuts are also exploding, with 5.8% of homes sold above their final list price, another sign of the market softening.

To address the affordability crisis, experts recommend an increase in active units on the market to around 900,000 to 1 million, a reduction in home prices of about 60%, or a substantial increase in household incomes.

The high interest rates and record prices are unsustainable and need to be corrected for the market to stabilize.

Housing Market Remains Strong Despite Rising Interest Rates

Median home sales prices are still relatively high, indicating affordability crisis

Rising Interest Rates Are Dampening Demand

Mortgage purchase applications and home-buying demand have decreased year-over-year.

Pending sales have also seen a decline

Market Correction Needed To Address Unsustainable Situation

Experts recommend an increase in active units on the market , reduction in home prices, or substantial increase in household incomes.

High interest rates and record prices are unsustainable