Sales of previously occupied U.S. homes slowed in August for the seventh month in a row, as sharply higher mortgage rates and rising prices made homebuying less affordable, further cooling the once red-hot housing market.
The average rate on a 30-year home loan rose to 6.02% last week, moving above 6% for the first time since 2008, according to mortgage buyer Freddie Mac. A year earlier, the rate averaged 2.86%.
Mortgage rates eased in July after climbing in June, which may have helped motivate homebuyers last month, limiting the sales decline. More recently, however, rates have been rising again along with the 10-year Treasury yield, which influences home loan rates. The 10-year yield traded at its highest levels since 2011 on Tuesday, reflecting expectations of further interest rate hikes by the Federal Reserve in its bid to squash inflation.
“That lock-in effect is continuing to impact inventory and I think it will continue to impact inventory going forward,” Yun said. In the four weeks ended Sept. 11, home listings fell 19% from a year earlier, the largest drop since May 2020, the real estate brokerage found.Some 1.28 million homes were on the market at the end of August, down 1.5% from July and flat versus August last year, NAR said.
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