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Washington, DC (CNN)US home buyers have a new challenge in addition to mortgage rates above 7%: Prices are rising again, reversing five months of year-over-year declines, according to a National Association of Realtors report released Tuesday.
The median existing home price was $406,700 last month, up 1.9% from a year ago when the median home price was $399,000. Prices rose in the Northeast, Midwest and South but were unchanged in the West in July, the NAR report found.
Prices were pushed up by the stubbornly low inventory of homes on the market — just 1.11 million existing homes were available to buy at the end of July, down 14.6% from a year ago. Current homeowners are refusing to sell and are hunkering down with their ultra-low mortgage rates that are at least half the current rates.
Sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — dropped below expectations and were down 2.2% from June to July. Annually, sales were down 16.6% from a year ago.
"Two factors are driving current sales activity — inventory availability and mortgage rates," said NAR chief economist Lawrence Yun. "Unfortunately, both have been unfavorable to buyers."