House prices 6.3% up, housing affordability is at a historic low

Housing affordability in the U.S. is at a historic low, with home prices hitting new records in April despite rising mortgage rates and increased housing supply. The S&P CoreLogic Case-Shiller National Home Price Index shows a 6.3% year-over-year increase in April, marking the second consecutive month of record highs. Mortgage rates jumped from 6.9% to 7.5% in April, yet prices continued to climb. The housing market remains one of the least affordable, with home prices 47% higher than in early 2020. Renters also face challenges, with rents up 26% since 2020 and half of all renter households spending over 30% of their income on housing. Homeowners are not faring much better, with 20 million cost-burdened by mortgage payments, rising insurance premiums, and property taxes. Despite an 18% year-over-year increase in for-sale inventory, housing supply remains tight, maintaining high prices. Mortgage rate hikes have reduced affordability further, leading to more price cuts and slower sales, yet well-priced homes still sell quickly.