Mary Chao
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LEARN MOREHow is the housing market?
It depends on whether it’s viewed from a past or future perspective.
Home sales were down 2.2% in July compared to a month earlier, according to the National Association of Realtors. But pending home sales — meaning deals that are expected to close — rose slightly, by 0.7%. It’s a signal that while home sales may still be sluggish, buyers may be adjusting to the new normal of higher mortgage rates.
According to real estate website Redfin, pending sales fell 15.7% year over year, the smallest annual decline since last summer. Pending sales have stabilized as the impact of higher mortgage rates has subsided.
“Home sales hit a bottom in 2022 and haven’t meaningfully budged since,” Daryl Fairweather, Redfin chief economist said in a statement. “Fading recession fears and the prospect of further home price increases have brought some house hunters off the sidelines, but for the most part, buyers remain hesitant to jump into the market because their buying power is so much lower than it was a year ago.”
The average 30-year fixed mortgage rate was 6.84% in July, up from 5.41% a year earlier. As of Monday, Aug. 28, the average 30-year interest rate was 7.61 % according to Bankrate.com.
Even with a decline in home sales, home prices continue to climb. The median existing-home sale price rose 1.9% from one year ago to $406,700, according to the National Association of Realtors.
While all regions experienced declines, the Northeast area saw the biggest drop in home sales. Sales were down 5.9% compared to a month earlier and 23.8% compared to July 2022.
