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After experiencing five months of year-over-year declines, home prices are once again on the rise as elevated interest rates create a growing shortage of for-sale housing. The median existing home price was $406,700 in July, up 1.9% from $399,000 at the same time last year. In addition, just 1.11 million existing homes were available to buy at the end of July, down 14.6% from a year ago, CNN reports.

Prices rose at the fastest pace in the Northeast, Midwest, and South but were unchanged in the West in July, where a number of local markets are still in correction mode after posting record gains throughout the COVID-19 pandemic.

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.”

Mortgage rates have remained volatile and have racheted higher since mid July, with average rates for a 30-year fixed rate mortgage topping 7% last week and hitting the highest rate in 21 years, according to Freddie Mac. That has made moving much harder for people.

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