Lawrence Yun reports that elevated mortgage rates and high median home prices are creating a tepid housing market for buyers.
Lawrence Yun, chief economist for the National Association of Realtors, noted that the combination of high mortgage rates and record-high national median home prices is making the housing market difficult, particularly for first-time buyers. Pending home sales in June fell by 5.4% month-over-month, while mortgage applications dropped 7% last week. Geopolitical tensions between the U.S. and Iran have contributed to market volatility, pushing the average 30-year fixed mortgage rate to 6.55%—the highest level in nearly a year. While softer inflation data in June provided some relief, rising oil prices have kept pressure on borrowing costs. Despite these challenges, housing demand remains positive year-over-year. Although the administration recently saw a bipartisan housing affordability bill become law, President Trump expressed personal opposition to the measure. Trump said the law was of minor importance compared to the need for lower interest rates. Experts suggest that while rates may drift lower by the end of 2026, they are expected to remain higher than the levels seen at the end of last year.