The real estate market is slowing down, but that doesn't mean home prices are getting more affordable — yet. Actually, prices and rents are still going up, Emily writes.

Why it matters: Perhaps you thought that the real estate market was all about location, location, location. Well, it's actually also about supply, supply, supply. The U.S. doesn't have enough homes to meet demand — even now, as fewer people want to buy in the face of rising mortgage rates.

• "The affordable housing problem is going to stick around no matter what," says Redfin chief economist Daryl Fairweather.
• This is yet another sign of how hard it'll be for the Fed to break the back of rising inflation.

Driving the news: Fresh data from the National Association of Realtors showed that the spring selling season is slow this year, with sales in May down 8.6% from last year.

• At the same time, the median price for an existing home crossed the $400,000 barrier for the first time (see the chart below).
• The number of sales dipped as buyers were scared off by mortgage rates hovering near 6%. And would-be sellers aren't incentivized to move — most are sitting on very low mortgage rates scored during the pandemic refi boom.

Meanwhile, rents are soaring. New rents on single-family homes (which make up half the residential market) were up 14% in May from last year, according to CoreLogic, a real estate analytics firm.

• In Miami, rents were up 41% from last year!
• Rising mortgage rates could actually put more pressure on the rental market: As first-time buyers put off a new purchase, they'll continue to rely on renting.

Between the lines: In a healthy housing market there should be a four- to six-month supply of homes for sale; that's the length of time it would take to sell off all the inventory.

• Right now we're at a 2.6-month supply, according to the NAR report. Still low, but actually a 33% increase since February, notes Ian Shepherdson, chief economist at Pantheon Macroeconomics.
• Shepherdson is one of the few housing market observers who is betting on home prices falling, rather than just leveling off. In his research note, he explains that after he calculated seasonal adjustments, single-family home prices actually fell slightly in May.

Zoom out: Partly because of the role real estate played in the financial crisis, a lot of folks are looking at housing now as a barometer for the overall economy. But we're in a whole different ballgame compared to 2007 — homeowners are sitting on record levels of equity and cheap mortgages.

What to watch: There's a lot of talk of recession risk, and certainly a downturn would impact the housing market. A rise in unemployment could cause an uptick in loan distress — but not to the levels we saw then, thanks to those equity cushions and stronger mortgage underwriting, says Molly Boesel, a principal economist at CoreLogic.

The price of a typical American home passed $400,000 in May for the first time, as would-be homebuyers continue to face daunting affordability, Matt writes.

Driving the news: The National Association of Realtors reported that the median-priced existing home climbed to $407,600 — an all-time high in records going back to 1999.

• In fact, housing prices have been up year over year for the last 123 consecutive months, a record.

Eye-popping stat: Adjusting for inflation, home prices are 18% higher than they were at the peak of the last housing boom, in June 2006, when the typical house would have cost about $345,000 in today's dollars.

The bottom line: The $400,000 threshold is just the latest big round number — along with gasoline prices at $5 a gallon — that drills the impact of inflation into the minds of consumers.

⛽️ Biden calls for a 3-month gas tax holiday. (Axios)

🇪🇺 IEA warns Europe over total shutdown of Russian gas. (FT)

📈 UK's 9.1% inflation rate is the highest in the G7. (CNN)

Job security jitters are on the rise, Axios’ Kate Marino writes.

• And why not? Recession chatter is all over the news (guilty ✋).

The big picture: The job market is still strong, with unemployment at a near-record low 3.6% — but the Federal Reserve wants to drive that up a bit to fight inflation. Workers have gotten the message.

Driving the news: Across all income brackets, the share of workers who fear a loss of employment income over the next month rose in June from the prior month, according to polling from the Morning Consult/Axios Inequality Index.

• In the lower-income group, that’s a reversal from May when job loss expectations trended down.
• Among those in the higher-income group, the share expecting job loss jumped by more than 5 percentage points — to its highest level in the last year (15.7%).

Worth noting: Especially in the higher-income group, the fears don’t yet line up with reality. The number of higher-income respondents who said they actually lost employment income in the prior four weeks was just 7%, basically unchanged from May.

The bottom line: "I think the feeling is just that something's not right about the economy, and it's starting to spook workers," says Jesse Wheeler, Morning Consult economic analyst.

“Sam became a lender of last resort.”

The big picture: The recent collapse in crypto prices has provoked a digital run by investors anxious to convert coins into good-old-fashioned American greenbacks, prompting a wave of crypto exchanges to block customer withdrawals.

Why it matters: With growing calls to boost regulation of the crypto world, it's in the interest of large players like Bankman-Fried to calm the recent wave of instability before it spills over and potentially impacts the non-digital economy.

• That would all but ensure much tougher regulation than a Senate proposal that's currently under consideration.