August Home Sales Decrease 15.3% as Mortgage Rates Rise and Inventory Remains Low

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According to the monthly report of the National Association of Realtors (NAR), in the month of August Home prices continued to increase up to 3.9% more than a year agoamid high mortgage rates and low inventory that has caused future buyers to stay away from the market.

Analysis shows that last month The cost of a home reached an average of $407,100 dollars compared to $391,700 a year ago. For Lawrence Yun, chief economist at NAR, “home prices continue to rise despite lower home sales,” he said.

According to data presented by NAR, the month of August is recorded as the fourth month with high prices, marking a period of growth where The price of the homes exceeded $400,000 dollars. “Supply needs to essentially double to moderate the rise in home prices,” Yun said.

In detail, costs for single-family homes, condos, townhomes and co-ops increased according to NAR in all four regions of the country: the Northeast, Midwest, South and West.

High mortgage rates affect the real estate market

Home buyers have stayed on the sidelines in recent months due in part to high mortgage rates, which the Federal Home Loan Corporation’s Freddie Mac report released last week showed. The 30-year fixed mortgage reached 7.09%being the highest figure in more than 20 years.

This caused Sales last month fell 15.3% compared to the previous year. Market expectations in August regarding sales were not met. In addition, the inventory of existing homes was also low at 0.9%.

On the other hand, the Census Bureau report, presented this Tuesday, indicated that the construction of new homes in the United States also fell 11.3% in August, compared to the July measure, this because mortgage rates remain high. .

In this regard, Kelly Mangold of RCLCO Real Estate Consulting “the combination of high interest rates, high prices and limited inventory has continued to plague the real estate market. In many cases, even buying back the same home at current mortgage rates would be out of range. price of a typical buyer,” he said.

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