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NPR
Last year was rough for homebuyers and Realtors® as a trifecta of forces made it harder than ever to buy a place to live. Or, at least the hardest in nearly three decades. Mortgage rates neared 8%. Home sellers tend to lower their prices when rates are high. But the nation has been in the midst of a severe housing shortage, so without enough homes to meet demand, prices just kept rising. "We've actually seen home prices continue to rise for six consecutive months," said Jessica Lautz an economist with the National Association of Realtors®. The group reported on Friday that the median home price in 2023 was $389,800 — a record high. Meanwhile, the number of homes sold fell to the lowest level since 1995. "The jump in interest rates that we saw last year really was a shock to the system," said Lautz. It's not just that higher mortgage rates made it nearly twice as expensive to buy the same-priced home as a couple of years before. The higher rates also affected the supply of homes on the market. Lautz says people who already have a home and a low 2% or 3% mortgage rate are less likely to put their house up for sale, because to buy another one they'd get stuck with a much higher rate. But while all that sounds pretty dismal for anyone wanting to buy a home, Realtors® sense that things are about to improve for buyers. "Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months," said NAR Chief Economist Lawrence Yun.