Key Highlights:
- There was a 2.4% fall in home sales consequently for months now as reported by the NAR reported.
- The Federal Reserve has started an aggressive campaign to tamp down inflation pressures by raising the interest rates that have raised the mortgage higher.
- The market is witnessing the longest-running streak with the prices rising for 122 consecutive months of year-over-year increases.
American real estate was facing a rise in prices and higher mortgage rates which have now affected the sales in the states. There was a 2.4% fall in home sales consequently for months now as reported by the National Association of Realtors (NAR) reported.
The Chief Economist of NAR, Lawrence Yun shared, “Higher home prices and sharply higher mortgage rates have reduced buyer activity. It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years.”
Home Sales decline consequently
Amid the pandemic, the rising demand for home buying had driven the prices even higher as the builders struggled to keep up the due to supply backlogs for lumber and other materials amid a shortage of workers. The Federal Reserve has started an aggressive campaign to tamp down inflation pressures by raising the interest rates that have raised the mortgage higher.
The average has raise by 2.96% in American real estate as compared to the mortgage rates in 2021. For a 30-year fixed-rate mortgage was nearly 5% in April, which was raised from 4.17 percent in March.
Also, the median existing-home price has increased for all the house types jumping to $391,200 i.e. a rise of 14.8% from April 2021. The same has been reported by NAR. The market is witnessing the longest-running streak with the prices rising for 122 consecutive months of year-over-year increases.
Comments from the experts
The slowing sales of recent months have enabled the inventory of unsold homes to recover, returning the market to the place it was last year. The single-family home sales fell by 2.5% last month and there was a 1.6% fall in sales for a condo.
Lawrence also outlined that despite the rise in prices, homes would not stay on the market long, selling in an average of 17 days. Nancy Vanden Houten from Oxford Economics also shared her thoughts on the housing market saying, “We expect existing home sales to lose more momentum as a sharp erosion in home buying affordability weighs on sales.”
