USA: Home resale declines for the fifth month in a row

USA: Home resale declines for the fifth month in a row

US existing home sales fell in June for the fifth consecutive month, as buyers were calmed by the rapid rise in interest rates and prices, which themselves reached a new record high. In June, 5.12 million home and apartment owners changed hands at an annual rate, which is 5.4% lower than May and 14.2% lower than June 2021, according to data released Wednesday by the National Association of American Realtors (NAR). This is the lowest number of transactions since June 2020. It is also much lower than expected, as analysts expected 5.40 million sales.

Prices continue to rise, albeit at a slower pace, with the average selling price reaching $416K, a new record (+13.4% in one year). “It is clear that the combination of high prices and high interest rates has changed the dynamics of the real estate marketLawrence Yun, chief economist at NAR, said during a conference call. As a result, the number of properties for sale began to rise in June, for the first time in three years. Thus, 12.6 million drugs were available at the end of June (+9.6% within one month, +2.4% within one year). “There is, finally, more real estate on the marketMister Yun greeted. The lack of properties for sale compared to strong demand has actually slowed the expansion of the market.

The real estate sector has benefited greatly from the COVID-19 crisis. Historically low interest rates, the strong savings many American households had, as well as their desire for space and greenery driven by remote work, have caused demand and prices to rise. But since the start of the year, interest rates have risen sharply and rapidly, reaching 5.51% over 30 years, compared to less than 3.00% the year before. The Mortgage Bankers Association announced Wednesday that mortgage applications fell in mid-July to their lowest level since 2000. On the new home front, housing starts fell 11.9% in May and 2.00% in June, according to Commerce Department data. Building sentiment in July fell to its lowest since May 2020, even hitting one of its worst levels ever, according to the monthly HMI from the National Association of Builders (NAHB) and Wells Fargo Bank.

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