The shortest month of the year managed to pack quite the punch for the housing market.
February saw the national median home list price climb to a new record high of $392,000, according to a Realtor.com® report. That hefty price tag is up an overall 12.9% compared with the previous year.
And while that double-digit percentage spike already sounds substantial, consider the fact that home prices have skyrocketed a full 26.6% compared with February 2020—right before the COVID-19 pandemic sent the housing market into overdrive.
This news couldn’t come at a worse time for buyers hoping to land an affordable home right now.
“Median home prices reached an all-time high in February just as mortgage rates surged to the highest level in almost three years,” says George Ratiu, senior economist at Realtor.com.
In effect, homebuyers are hit on two fronts at once, “compounding the squeeze on consumers’ budgets from inflation and making it harder for buyers to afford a home,” adds Ratiu.
Over the past six months, mortgage rates increased by an entire percentage point, with the 30-year fixed-rate loan averaging 3.89% for the week ending Feb. 24, according to Freddie Mac. This has raised alarm bells among buyers who believe they should get moving on their house hunt now, before rates rise even higher.
“Buyers today are feeling a sense of urgency brought on by both rising home prices and rising mortgage rates,” says Ali Wolf, chief economist at Zonda, a housing data and consultancy firm. “There’s this fear that if they don’t buy today, they may never be able to.”
