US Q2 Home Prices Hit Record High of 540 Million Won... Growth Rate Slows Down

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] U.S. home prices set a new record high in the second quarter. However, the soaring home prices combined with the burden of rising loan interest rates have started to slow the price increase trend.

According to the National Association of Realtors (NAR) on the 11th (local time), the median price of single-family homes in the U.S. in the second quarter surged 14.2% year-on-year to $413,500 (approximately 538.38 million KRW). This is the first time quarterly home prices in the U.S. have surpassed $400,000.

By region, almost all areas saw sharp increases in home prices. Among 185 metropolitan areas, 80% recorded double-digit growth rates. This is higher than the 70% in the first quarter. The Wall Street Journal (WSJ) reported that only one metropolitan area (Trenton, New Jersey) experienced a decline in home prices compared to last year.

This rise in home prices is largely due to supply shortages. New home construction is also being delayed due to global supply chain disruptions and labor shortages.

However, the price increase rate in the second quarter slowed compared to 15.4% in the first quarter. WSJ reported that home price growth has already begun to slow in some regions, and housing economists expect the nationwide increase to significantly decelerate by the end of the year. Observers note that demand may further freeze due to high home prices combined with mortgage interest rate hikes.

According to the U.S. government-sponsored mortgage company Freddie Mac, the 30-year fixed mortgage rate this week rose again above 5% to 5.22%. Currently, the average monthly mortgage payment for a typical single-family homebuyer in the U.S. in the second quarter is $1,841, soaring about 50% compared to $1,229 in the same period last year.