Rising Mortgage Rates Cut into Home Sales
Summary
Home Sales Are Beginning to Adjust to Higher Mortgage Rates
Sales of existing homes fell 3.4% in May to a 5.41 million-unit annual rate. Sales of single-family homes fell 3.6% to a 4.8 million-unit pace, while sales of condominiums and co-ops fell 1.6% to a 610,000-unit pace. Existing home sales have now fallen back to their pre-pandemic pace. Higher prices and rising interest rates have reduced affordability. The median price of all existing homes, condos and co-ops has risen 14.8% over the past year to $407,600, marking the first time the median home price has surpassed $400,000. With mortgage rates up nearly two-and-a-half percentage points from where they began the year, the number of homes available for sale is increasing, and we are beginning to see more discounting. There were 1,160,000 homes available for sale at the end of May, which is up 12.6% from the prior month but still 4.1% below its year-ago level. At the current sales pace, this inventory equates to a 2.6-month supply of homes. A 4-to-5 month supply would be considered normal. READ FULL ARTICLE>>