U.S. home sales fell in August, the seventh straight month of sales declines.
National Association of Realtors said Wednesday said existing home sales fell to 4.8 million last month, down 0.4% from July. Home sales fell nearly 20% from last year and were at their slowest annual pace since May 2020. The housing market has cooled Their levels doubled in January.
The average rate on a 30-year home loan rose to 6.02% last week, topping 6% for the first time since 2008, according to mortgage broker Freddie Mac. Every percentage point increase in mortgage rates adds upFor monthly payments. A jump in rates means a typical homebuyer will pay up For a 30-year mortgage.
“Rising mortgage rates have clearly hampered the housing market,” said NAR Chief Economist Lawrence Yoon.
The Federal Reserve on Wednesday in its ongoing battle against inflation— Fifth increase this year. But the latest increase in the federal funds rate is unlikely to affect mortgage rates in the near term because current borrowing costs are already “worth” the Fed’s three-quarter point move, Redfin chief economist Daryl Fairweather told CBS MoneyWatch.
Still, economists expect home sales to continue to decline for the rest of this year, noting that prices will remain higher than a year ago. According to the NAR, the national median home price in August was $389,500, up 7.7% from a year earlier.
Higher home prices and interest rates have pushed mortgage payments on a typical home from $897 to $1,643 per month, an 83% increase over the past three years, according to Zillow.
“Now that the market is cooling, there’s less competition per home, more time to make these critical decisions and more negotiating power in the hands of buyers than at any time in years,” said Nicole Bachaud, senior economist at Zillow. “On the other hand, vendors need to reset their expectations.”
The Associated Press contributed to this report.