The U.S. housing market doesn’t look like it’s getting any more palatable for potential homebuyers anytime soon — at least not in the country’s major metropolitan areas.
In all 50 of the most populous U.S. metro areas, median home prices either climbed from a year earlier or stayed flat in the four weeks ended April 28, according to a new report by real estate services firm Redfin.
The median sale price of a home nationwide rose 4.8% from a year earlier to a near-record $383,188, Redfin found. This is being driven by a confluence of factors, including the number of new listings falling short of typical levels for April and persistently high mortgage rates.
Read more: Florida and Texas have a surging supply of houses — but people aren’t buying
And it’s not just home prices that are a headache for prospective homebuyers. The combination of these high prices with elevated mortgage rates has boosted the median monthly housing payment by 15% year-over-year to a record $2,890, according to Redfin.
The average rate on a 30-year-fixed mortgage ticked down slightly to 7.41% on Wednesday after the Federal Reserve said it would be holding rates steady, according to Mortgage News Daily’s daily data — but it remains high, hovering at about its highest daily level since last November.
Sean Salter, an associate professor of finance at Middle Tennessee State University, told Bankrate that he expects rates to dip following the Fed announcement, but that they will likely return to previous levels and even rise following the temporary reprieve.
Zillow earnings paint a gloomy picture
Real estate listing site Zillow reported solid first-quarter earnings on Wednesday, but warned of a slowdown in the second-quarter that cast a shadow over its performance.
In a shareholder letter, Zillow said it expects revenue from its residential business to fall between $372 million to $382 million in the second quarter — down from the $393 million that it brought in during the first three months of the year.
The company pointed to two major headwinds that are driving its cautious outlook: weak first-time homebuyer activity and the rise in mortgage rates to the mid-7% range.
Zillow said rentals, on the other hand, present a “significant growth opportunity ahead.” The business makes up one-fifth of the company’s total revenue, growing 31% year-over-year during the first quarter. Zillow said it expects rentals revenue to grow in the mid-20% range over the next quarter.