Sales of previously occupied U.S. homes slowed for the fourth consecutive month in May as climbing mortgage rates and prices discouraged many would-be buyers
The National Association of Realtors said Tuesday, June 21, 2022, that existing home sales fell 3.4% last month from April to a seasonally adjusted annual rate of 5.41 million.
That annual sales pace was higher than what economists had expected, according to FactSet. Sales fell 8.6% from May last year. The housing market, a crucial part of the economy, is slowing as homebuyers facing sharply higher home financing costs than a year ago following a rapid rise in mortgage rates.Average long-term U.S. mortgage rates had their biggest one-week jump in 35 years with the Federal Reserve last week raising its key rate by three-quarters of a point in a bid to combat the worst inflation in 40 years.
The weekly average on the 30-year rate hovered slightly above 5% for much of May, so the more recent increases in rates have yet to be reflected in the home sales data.“Today's mortgage rates are knocking on the door of 6%,” said Lawrence Yun, NAR’s chief economist. “Given those conditions, I do anticipate further declines in home sales.”
With inflation at a four-decade high, rising mortgage rates, elevated home prices and tight supply of homes for sale, homeownership has become less attainable, especially for first-time buyers.
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