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Home sales are down. So why are prices at an all-time high? (www.npr.org)

submitted 1 week ago by MicroWave@lemmy.world to c/economics@lemmy.world

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Home prices hit an all-time high in June, even as the housing market continued its post-pandemic slump.

The median price for an existing home sold last month was $435,300, besting the previous record, set in June 2024, according to data from the National Association of Realtors. But overall, sales numbers were at a nine-month low, seasonally adjusted. Sales in June decreased 2.7% from a month earlier.

How can prices be so high when the market is so slow?

"Today's housing market is really haves and have-nots," says Jessica Lautz, deputy chief economist at the National Association of Realtors.

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[–] shortwavesurfer@lemmy.zip -1 points 1 week ago (2 children)

This, the fact that we have a fiat currency, causes scarce items to be more valuable than they otherwise would be as a savings vehicle, and not as a utility.

On a hard money standard, housing would not be nearly this overvalued because the money would hold its value properly.

[–] jacksilver@lemmy.world 3 points 1 week ago

I mean, generally speaking in our fiat system housing prices go up so that houses keep their value (if prices didn't rise with inflation, then houses would loose value over time).

The reason why we see housing prices not coming down right now (if I had to take a guess) is high interest rates. Since a lot of buyers have locked in low interest rates the sale price for existing homeowners must offset the new interest rates, otherwise they'll loose money on the sale.

This would be true in a hard money standard too, as even if the prices of the houses remained constant, higher interest rates would make mortgage payments higher (thus increasing the true cost of the house). So existing home owners would increase prices to offset higher interest rates.

[–] aesthelete@lemmy.world 1 points 1 week ago* (last edited 1 week ago)

In a sane country with a sane group of politicians implementing evidence-based policy, we would have wages that kept up with housing inflation, prevented blackrock and friends from buying up all of the housing, and built higher density housing in cities as a pressure release valve so that we had much more supply.

There are many factors and fiat currency isn't really one of them.