Home prices hit $408,800 as affordability collapses despite growing inventory

The median price of an existing home reached $408,800 in March, a record high. This is the 33rd straight month of year-over-year price growth, even as sales of existing homes fell 3.6% from February—defying expectations for a seasonal rebound. Inventory remains tight, with the supply-to-demand ratio below historical norms. The National Association of Realtors estimates the market would need 300,000 to 500,000 more homes for sale to approach balance. The U.S. housing shortage stands at 4.7 million units, according to a 2025 Zillow report, a structural deficit that continues to prop up prices. Mortgage rates remain high at 6.37%, supported by elevated Treasury yields as oil prices hold at $94 per barrel amid ongoing geopolitical tensions in Iran. Consumer sentiment has dropped to 47.6, the lowest in 74 years, dampening buyer appetite. Nearly three in five Americans now believe AI-driven job automation will make homeownership harder. The median age of first-time homebuyers has risen to 40, signaling deep affordability challenges. As a result, many rely on family financial support—the so-called 'Bank of Mom and Dad'—while some employers offer $6,500 toward home purchases. Over the past six years, the typical homeowner has accumulated $128,100 in housing wealth.