B4 • Friday, June 24, 2022
THE GARDEN ISLAND
thegardenisland.com
Home sales slow, prices continue to rise Alex Veiga ASSOCIATED PRESS
Sales of previously occupied U.S. homes slowed for the fourth consecutive month as climbing mortgage rates and record high prices discouraged house hunters. Existing home sales fell 3.4% last month from April to a seasonally adjusted annual rate of 5.41 million, the National Association of Realtors said Tuesday. That annual sales pace was higher than what economists had expected, according to FactSet. Sales fell 8.6% from May last year. After climbing to a 6.49 million annual rate in January, sales have fallen to the slowest pace since June 2020, near the start of the pandemic, when they were running at an annualized rate of 4.77 million homes. Even as home sales slowed, home prices kept climbing in May. The national median home price jumped 14.8% in May from a year earlier to $407,600. That’s an all-time high according to data going back to 1999, NAR said. 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
still short of the 4-month supply that reflects a more balanced market between buyers and sellers. Yun expects the inventory of homes for sale will be running above year-ago levels by autumn. This year’s pullback in home sales has led some economists to adjust their housing market outlook for 2022. Realtor.com is now expecting U.S. home sales will decline 6.7% from last year. That would still make 2022 the second-best year for home sales since 2007 behind 2021, according to Danielle Hale, Realtor.com’s chief economist. Yet even with higher mortgage rates straining affordability, homes that sold didn’t stay on the market for long. On average, homes sold in just 16 days of hitting the market last month, the fastest sales pace tracked by the NAR. It was 17 days in April. With inflation at a four-decade high, rising mortgage JOHN RAOUX / ASSOCIATED PRESS FILE rates, elevated home prices and tight supply of homes for sale, homeownership has A home for sale is seen Tuesday, Dec. 8, 2020, in Orlando, Fla. become less attainable, essales data. from the previous month. a point in a bid to combat flecting expectations of pecially for first-time buyers. “Today’s mortgage rates Some 1.16 million properties the worst inflation in 40 higher interest rates overall. First-time buyers acare knocking on the door of were available for sale by years. The Fed has signaled its incounted for 27% of transac6%,” said Lawrence Yun, the end of May, up 12.6% The average rate on a 30- tention to to keep hiking its tions, down from 28% the from April, but down 4.1% year home loan climbed to short-term rate as it tries to NAR’s chief economist. previous month and 31% in “Given those conditions, I do from April last year. 5.78% last week, the highest cool off the U.S. economy May last year, the NAR said. Even so, at the current its been since November of without causing a recession. anticipate further declines in Real estate investors and home sales.” sales pace, the level of for2008 during the housing criThe weekly average on other buyers able to buy a Some real estate trends fa- sale properties amounts to a home with just cash, sidethe 30-year rate hovered sis, according to mortgage slightly above 5% for much buyer Freddie Mac. vored buyers last month. As 2.6-month supply, the NAR stepping the need to rely on said. That’s up from 2.2 The rise in mortgage rates of May, so the more recent is typical this time of year, financing, accounted for 25% increases in rates have yet follows a sharp move up in the number of homes on the months in April, and 2.5 of all sales last month, down months a year ago. That’s to be reflected in the home 10-year Treasury yields, remarket increased in May from 26% in April, NAR said.
Average long-term US mortgage rates inch up to 5.81% ASSOCIATED PRESS WASHINGTON — Average longterm U.S. mortgage rates inched up this week following last week’s mammoth jump, the biggest in 35 years. Mortgage buyer Freddie Mac reported Thursday that the 30-year rate ticked up to 5.81% this week, from last week’s 5.78%. Last week’s average — which jumped more than a half-point from the previous week — was the highest since November of 2008 during the housing crisis. One year ago, the average 30-year rate was 3.02%. The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, rose to 4.92% from 4.81% last week. A year ago, the rate was 2.34%. Last week, the Federal Reserve raised its benchmark rate by three-quarters of a point, the biggest single hike since 1994. The Fed’s unusually large rate hike came after government data showed U.S. inflation rose in May to a four-decade high of 8.6%. The Fed’s benchmark short-term rate, which affects many consumer and business loans, will now be pegged to a range of 1.5% to 1.75% — and Fed policymakers forecast a doubling of that range by year’s end. Higher borrowing rates appear to be slowing the housing market, an important pillar of the economy. Sales of previously occupied U.S. homes slowed for the fourth consecutive month in May as climbing mortgage rates and record high prices discouraged house hunters.