B4 • Friday, May 19, 2023
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High mortgages, few homes lead to biggest annual price drop in 11 years
Through the first four months of 2023, existing home sales are running about 27 percent below the LOS ANGELES — A perpace in the same stretch sistently low inventory of last year. Sales are down 33 homes on the market held percent from their most reback U.S. home sales again in April, even as the nacent peak in January 2022, the NAR said. tional median sale price The shortage of homes posted its biggest annual for sale has kept the mardrop in 11 years. Existing home sales fell ket competitive, driving 3.4 percent in April from bidding wars in many March to a seasonally adplaces, especially for the most affordable homes. justed annual rate of 4.28 The combination of high million, the National Assoborrowing costs and inciation of Realtors said Thursday. tense competition for the That’s slightly below most affordable homes on what economists were exthe market is keeping many first-time buyers on the pecting, according to sidelines. They accounted FactSet. for 29 percent of home Sales sank 23.2 percent sales last month, up from compared with April last 28 percent in March. year. The annual drop was All told, there were 1.04 steepest in markets across million homes on the marthe Western part of the country, where sales ket by the end of April, up plunged more than 30 per7.2 percent from the previPHELAN M. EBENHACK / ASSOCIATED PRESS FILE cent from a year earlier. ous month and up 1 perThe national median Real estate signs are posted outside homes for sale on Tuesday, Feb. 21, 2023, in Valrico, Fla. cent from April last year, home price slipped 1.7 perthe NAR said. That’s still 30-year mortgage began to rowing rate — the central to mortgage buyer Freddie well below pre-pandemic cent from April last year to homes for sale and eleclimb from ultra-low levels, bank’s main tool against Mac. A year ago it averaged levels. Consider, in April $388,800, the NAR said. vated borrowing costs. 2019 there were 1.8 million While modest, the year“We have a very strange eventually doubling to just four-decade high inflation. 5.25 percent. over 7 percent by the fall. homes on the market. “Right now, home sales over-year decline is the The average rate on a 30dynamic,” said Lawrence That amounts to a are just bouncing a little biggest since January 2012, Yun, the NAR’s chief econo- When mortgage rates rise year mortgage climbed to 2.9-month supply at the the tail end of a a multiyear mist. “Sales are down, even they can add hundreds of 6.7 percent in early March, higher or a little lower, decurrent sales pace, an imslide in home prices after prices are down, yet multi- dollars a month in costs for which likely hurt sales in pending upon the movethe mid-2000s housing bub- ple offers are happening on homebuyers on top of alApril, as a lag of a month or ment of the mortgage provement over the two usually exists between rates,” said Yun. at least one-third of the 2.6-months in March and ble burst. ready high home prices. a signed contract and a properties (that) have The elevated rates and 2.2 months a year ago. Still, The latest housing marThat benchmark home been sold above their list low for-sale inventory have in a more balanced market loan rate tends to track the completed home sale. ket figures are more eviMortgage rates have price.” forced many would-be between buyers and sellmoves in the 10-year Treadence that even with mostly edged lower since The U.S. housing market sury yield, which rose homebuyers to the sideprices easing back after risers, there is a 5- to 6-month that early March spike. The lines during the past year, sharply last year as bond supply. ing for more than a decade has yet to emerge from a average rate on a 30-year slump that started a little investors reacted to the “If we had more invenmany would-be homebuyresulting in a lackluster home loan rose to 6.39 per- start to the spring homemore than a year ago, Federal Reserve aggresers remain frustrated by a tory more sales could get when the average rate on a sively hiking its main borstubbornly low supply of done,” Yun said. cent this week, according buying season. Alex Veiga ASSOCIATED PRESS
Average mortgage rate rose to 6.39 percent this week ASSOCIATED PRESS LOS ANGELES — The average long-term U.S. mortgage rate edged higher this week after a twoweek drop, a modest move in line with a mostly moderate shift in home-loan rates in recent weeks. Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan rose to 6.39 percent from 6.35 percent last week. The average rate a year ago was 5.25 percent. The average benchmark rate has moved lower in seven of the last 10 weeks since reaching a high for this year of 6.73 percent in early March. Still, it remains elevated relative to 2020 and 2021, when the average rate fell below 3 percent. High rates can add hundreds of dollars a month in costs for homebuyers, limiting how much buyers can afford at a time when the housing market has slowed, but remains unaffordable to many Americans after years of soaring home prices. “Higher mortgage rates have slowed home purchase activity during a time in the year when typically home shoppers are out in full force,” said Lisa Sturtevant, chief economist at Bright MLS. “Rate-sensitive homebuyers have either been priced out of the market or are holding off in the hopes that rates will fall.” Sales of previously occupied U.S. homes fell 23.2 percent in the 12 months ended in April, marking nine straight months of annual sales declines of 20 percent or more, according to the National Association of Realtors.
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