The housing market is reportedly experiencing a slight decline in jobs

Via Alex Veiga

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LOS ANGELES – U.S. property sales declined for the third consecutive year as rising lending rates and record-high costs discouraged many potential home buyers in what is historically the housing market’s busiest period. 12 months.

Existing home sales fell 0.7 percent from April in the final minute to a seasonally adjusted annual rate of 4.11 million. Nationwide Association of Realtors,

Gross sales also declined by 2.8% compared to May 2023. The latest sales still came in at 4.07 million, well above economists’ expectations, according to FactSet,

“I thought we’d actually see a recovery this spring, (but) we’re not seeing it,” said Lawrence Yun, chief economist at NAR.

Despite the decline in sales, home prices increased year-on-year for the eleventh consecutive time. The nationwide average sales price rose 5.8 percent from last year to $419,300, an all-time high according to data dating back to 1999. This is 51 percent more than five years ago.

Home prices rose while gross sales slowed and the availability of homes on the market reached its highest level in four years.

“It’s a somewhat strange phenomenon,” Yun said. “Our home sales activity was down, prices are reaching record highs and homes look like they are still getting many offers.”

The US housing market is stuck in a downturn again in 2022, when loan rates begin to climb from pandemic-era lows. According to Loan Buyer, existing home sales fell to a nearly 30-year low last year, as the average rate for a 30-year loan rose to a 23-year high of 7.79 percent. freddie mac,

The average rate for a 30-year loan has typically been around 7 percent this year as stronger-than-expected experiences on the economy and inflation have forced it down. federal security To stock its transient rate at the highest level in more than twenty years.

Fed officials said earlier today that inflation has fallen more than their target level of 2 percent in recent months and indicated they expect to cut their benchmark interest rate once this year. The central bank had so far forecast three cuts in 2024, raising expectations of a further reduction in lending rates in the housing market.

“Maybe the Federal Reserve’s interest rate cut policy, which was anticipated to happen but didn’t happen — it’s been delayed and delayed — is probably what’s driving the recovery in home sales,” Yun said. “I’m getting delayed.”

Increased loan rates are keeping many owners who purchased or refinanced more than two years ago from selling now because they don’t want to drop their fixed-rate mortgage below 3 or 4 percent — a pattern real common. Please consult an estate professional because of the “lock-in” effect.

By the end of 2023, more than 50% of homes with loans had fees of 4% or less, and 87% had fees of 6% or less, according to realtor.com,

Another factor constraining the housing market is the good supply of houses on the market, although this is easing this year, partly because properties are taking longer to sell.

All told, there were about 1.3 million unsold properties at the end of last minute — a 6.7 percent increase from April and an 18.5 percent increase from May 2023, NAR said.

This means a 3.7 month offer on Wave Sales Show. Availability is 4 to 5 months in an additional balanced market between consumers and dealers.

“Let’s wait to see if that leads to more home sales,” Yun said. “So far, that’s not the case, but at least the inventory is starting to loosen up.”

Despite the increase in properties available on the market this spring, dealers generally have limited availability for consumers.

Home buyers typically purchase a home within 24 days of it going on the market. And 30% of those homes were purchased for more than their actual list cost, which usually indicates dealers are receiving offers from a few opportunities.

First-time home buyers who do not have a home equity in mind for their negotiated price face difficulties when entering the market. Their share of all properties bought at the last minute was 31 percent, down from 33 percent in April, but more than 28 percent in May 2023. Historically their share in gross sales has been 40 percent.

Home buyers who can avoid loan fees and raise money to pay all the money down account for 28 percent of gross sales at closing, up from 25 percent in May 2023. NAR said the number of individual investors or homeowners looking to buy a second home is up 15 percent from last year.