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Existing home sales fell in August and prices fell dramatically


Sales of previously owned homes fell 0.4% in August at a seasonally adjusted annual rate of 4.80 million units, according to the National Association of Realtors. Nation. That’s the slowest sales pace since May 2020, when operations stalled very quickly due to the start Covid pandemic.

Also, this is the slowest pace since November 2015. Sales are 19.9% ​​lower than in August 2021.

The sales figures represent closings, so contracts were likely signed in June and July, when mortgage rates rose higher and then fell again. The average interest rate on a popular 30-year fixed mortgage started in June at around 5.5% and then rose more than 6% by mid-month, according to Mortgage News Daily. It then dipped slightly, hanging in the 5.7% range for most of July before falling further into the low 5% range at the end of the month.

The 30-year flat rate starts this year at 3%. Now it’s close to 6.5%.

Even if interest rates make housing less affordable, prices are still higher than they were a year ago. The median price of an existing home sold in August was $389,500, up 7.7% from a year ago. House prices have historically fallen from July to August, due to seasonality, but this year’s declines were broader than usual, indicating a slight decline.

From June to August, prices are usually down about 2%, but this year have fallen about 6%.

Lawrence Yun, chief economist at Realtors, said: “The housing market is showing an immediate impact from changes in monetary policy, and noted that he will be adjusting his annual sales forecast. I went even lower due to higher mortgage rates. “Some markets may be seeing a drop in prices.”

Sales fell across all price ranges, but were stronger in the lower end. Sales of homes priced between $250,000 and $500,000 were down 14% from last year, while sales of homes priced between $750,000 and $1 million were down just 3%. Much of that has to do with supply, which is most tilted in the lower end of the market.

Prices are still being supported by tight supply. There were 1.28 million homes for sale at the end of August, unchanged from a year ago. At current sales rates, that represents a 3.2-month supply.

Danielle Hale, chief economist at Realtor.com.

Builders bounced back as demand fell, but there was a small drop in single-family housing starting in August, according to the US Census, according to the US Census. That could be due to a short-term drop in mortgage rates, which makes buyers more interested. But building permits, an indicator of future construction, have fallen as mortgage rates are expected to rise again.



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