In the second quarter, the national median price was up 1.8% from the prior year. Prices were up 7.6% in the Midwest and 2.4% in the West, but were down 1.6% in the South and 6.6% in the Northeast. The Census Bureau does not report regional median prices by month, only quarterly and annually. In June, the national median price fell to $310,800, a 4.2% decline from the prior month, following a notable increase in May. Compared to a year ago, the median price was down 3.4%, the third year-ago decline in the past five months. The 12-month moving average trend of price growth has been slowing over the last couple of years, and in June reached a new cyclical low of 2.4%. This suggests new home prices may be getting close to a cyclical peak. The decline in the median price in June had a lot to do with a change in the mix of homes sold, as sales in the $200K-$299K price range rose while sales in the $300K-$399K price range declined.
With inflation slowing and still below the Fed’s target of 2.0%, the Fed held rates steady at today’s FOMC meeting. However, the bigger issue is when the Fed will start to reduce its balance sheet, which they said will begin relatively soon. This will likely push up mortgage rates, but inflation will also play a big part.