Home price growth decelerates, but affordability gap persists

The national median home price rocketed to an all-time high of $390,000 in Q2, surpassing the previous record-high of $365,000 set in Q1. Meanwhile, average mortgage rates increased by 1.47 basis points in the second quarter to 5.33%.

However, recent data from Black Knight revealed that annual home price appreciation plummeted nearly two percentage points in June, marking the biggest single-month slowdown since at least the early 1970s.

“For context, during the 2006 downturn, the strongest single-month slowing was 1.19% – about what we saw last month – and June topped that by 66%,” said Ben Graboske, president of Black Knight Data & Analytics.

“Overall, the national price deceleration inevitably followed the softening sales, providing well-positioned prospective buyers a small measure of welcomed relief,” said NAR chief economist Lawrence Yun. “The recent dips in mortgage rates will bring additional buyers to the market, especially in those places where home prices are still relatively affordable and where jobs are being added.”