U.S. Median Home Price Hits Record High in June

Buyers, beware -- you're apt to pay more for a home these days.

You'd think that at some point, today's home buyers would get tired of inflated property values and start backing off. But it looks like they're still willing to pay up.

In June, the median existing home price climbed to $363,300, according to the National Association of Realtors. That marks a 23.4% uptick from a year prior. It's also a record high.

Now, rising home prices are great for sellers. But they're making today's housing market very difficult for buyers to navigate.

Bidding wars and more

A big reason home prices are up is because the supply of properties to buy is low. And since mortgage rates are also low, buyers are eager to capitalize on them -- even if it means paying extra to purchase a home.

Compounding the problem is that bidding wars, where two or more buyers duke it out over the same home, have become extremely common in today's market. Bidding wars can easily drive up home prices. And when sellers see homes in their neighborhoods fetch prices that are well above asking, it can lead them to raise their own listing prices from the get-go.

Now the good news is that homes sold in June received four offers on average, down from five offers on average in May. That could mean that some buyers are finally backing off.

But still, home prices today are high, and they're likely to remain high until a substantial influx of listings hits the market. So today's buyers will need to assess whether it pays to purchase a home in the near term or wait things out.

The case for waiting

The draw of buying a home today? Locking in a low mortgage rate. But rates are likely to stay low well into 2022. As such, buyers who put their home searches on pause and resume later this year or early next year may benefit from more inventory. Not only could that mean more options to choose from, but it could also mean fewer bidding wars, lower prices, and less stress overall.

In fact, buyers who wait have an opportunity to sock away more funds for a down payment, which could give them a higher price range to work with once they're ready to start looking at properties again. Waiting also gives buyers a chance to boost their credit scores, which isn't something that's typically done overnight.

Mortgage lenders tend to reward applicants who have strong credit scores with the most competitive rates available. So buyers with credit that's decent but not outstanding could reap a lot of savings by raising their scores.

The fact that home prices reached a record high in June isn't surprising. Once housing inventory opens up, home prices should start to come down, but that may not happen anytime soon. Those who do move forward with their home-buying plans need to prepare to pay up and take on higher mortgages to swing a place of their own.