The number of home sales across the U.S. slowed in August, the seventh straight month of declining sales.
National Association of Realtors Say Existing-home sales fell to 4.8 million last month on Wednesday, down 0.4% from July. Home sales were down nearly 20 percent from last year and posted their slowest annual growth rate since May 2020.The housing market has cooled Mortgage rates up to 6%doubling the level in January.
The average interest rate on a 30-year home loan rose to 6.02% last week, rising above 6% for the first time since 2008, according to mortgage buyer Freddie Mac.Mortgage rates increase for every percentage point increase hundreds of dollars Pay monthly.Rising interest rates mean the typical home buyer will pay up to $600 more per month 30 year mortgage.
“Rising mortgage rates are clearly holding back the housing market,” said Lawrence Yun, chief economist at NAR.
Amid ongoing battle with inflation, the Fed on Wednesday Raise the target rate by 0.75 percentage points – Fifth hike of the year. But Redfin Chief Economist Daryl Fairweather told CBS MoneyWatch that the recent hike in the federal funds rate is unlikely to affect mortgage rates in the near term, as current borrowing costs already “reflect” three-quarters of the Fed’s move.
Still, economists expect home sales to continue falling for the rest of the year, while noting that prices are still higher than a year ago. The national median home price was $389,500 in August, up 7.7% from a year ago, according to NAR data.
Higher home prices and interest rates have pushed mortgage payments on a typical home from $897 to $1,643 a month, an 83% increase over the past three years, according to Zillow.
“Now that the market is cooling, there’s less competition per household, more time to make these critical decisions, and more bargaining power in the hands of buyers than at any time in the past few years,” said Nicole Bachaud, senior economist at Zillow. “Sellers, on the other hand, had to reset their expectations.”
The Associated Press contributed to this report.
