US home sales slowest in more than a year as mortgage rates and prices climb
Summary
Sales of previously owned homes in the US dropped 2% in August to the slowest pace in over a year due to higher mortgage rates and rising home prices. Despite the slowdown, home prices continued to rise, reaching a record high for August.Key Facts
- Existing home sales fell to an annual rate of 3.98 million units in August, the lowest in more than a year.
- Home sales have declined for three months in a row and are below the usual historic level of about 5.2 million.
- Mortgage rates have increased since February, now averaging 6.76% for a 30-year loan, the highest in over 14 months.
- Rising inflation and oil prices pushed up long-term bond yields, which influenced higher mortgage rates.
- The median US home price in August was $429,100, the highest for that month since 1999.
- Home prices have increased yearly for 38 months straight despite slower sales.
- The number of homes for sale rose 3.2% from July but is still below pre-pandemic levels.
- The current supply of homes equals about 4.9 months, the highest in a decade but still within a balanced market range.
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