The total valuation of U.S. homes reached an all-time record of $46.8 trillion in June as tight inventory pushed up costs for more than 90 million residential properties analyzed by Redfin. U.S. home values were up 0.4% from a year earlier in June 2022, and are a staggering 19.1% higher than two years ago, Insider reports.
The supply shortage that's driving up housing prices directly correlates to steady increases in the 30-year, fixed rate mortgage, forcing sellers to the sidelines and setting the stage for a more expensive real estate market.
"The dominance of the 30-year fixed rate mortgage in America is propping up home values," Redfin economist Chen Zhao said. "Tons of homeowners scored an incredible deal during the pandemic: a 3% mortgage rate for the remainder of their 30-year loan. Now they're staying put because moving would mean taking on a rate that's twice as high. This means buyers who are in the market now are duking it out for a very small pool of homes, preventing home values from plunging."
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