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Housing prices are still incredibly high

Home prices surged to a record high in May, according to a recent report from real estate data and analytics company Black Knight.

Black Knight vice president of enterprise research Andy Walden said five consecutive months of gains have “fully erased the pullback” in home prices that began in July 2022.

Redfin currently places the median home sales price at just over $426,000.

And mortgage rates have just climbed to 6.96% — their highest level since November 2022, when rates topped 7%.

This combination of high prices and mortgage rates have made housing increasingly unaffordable for the typical American. Middle-income buyers can now afford to buy less than a quarter of listings compared to five years ago when they could take a swing at about half of all available homes, according to NAR.

Stop overpaying for home insurance

Home insurance is an essential expense – one that can often be pricey. You can lower your monthly recurring expenses by finding a more economical alternative for home insurance.

Officialhomeinsurance can help you do just that. Their online marketplace of vetted home insurance providers allows you to quickly shop around for rates from the country’s top insurance companies, and ensure you’re paying the lowest price possible for your home insurance.

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What can prospective buyers do?

Experts say it’s necessary to increase inventory in order to bring home prices down.

"Ongoing high housing costs and the scarcity of available homes continues to present budget challenges for many prospective buyers, and it's likely keeping some buyers in the rental market or on the sidelines and delaying their purchase until conditions improve," Realtor.com chief economist Danielle Hale told NAR.

"Those who are able to overcome affordability constraints may be increasingly drawn to newly constructed homes or to the suburbs and beyond, both of which may offer buyers more realistic opportunities for homeownership in the near term."

There are other options for buyers encountering affordability hurdles as well.

Fix your credit score

With a higher credit score, you might be able to score a lower mortgage rate — in fact, applicants with scores of 740 or higher typically enjoy the lowest rates. Make sure to regularly check your score, inspect your credit report for errors, pay all your bills in full and on time and clean up any remaining debt still on the books.

Build your savings

Even if you can’t afford a home just yet, work on building your savings for a future down payment. With a conventional loan, the minimum down payment is typically 5% of the purchase price, but experts recommend putting at least 20% down to lower your monthly mortgage bill.

Compare different lenders

Don’t forget to shop around for different rates instead of settling for the first one you see — research shows comparison shopping can save you thousands of dollars over the life of your loan. Look into getting a preapproval from a lender as well. Having some proof of your reliability as a buyer could up your negotiating power with a seller or real estate agent.

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Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.

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