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THE GARDEN ISLAND
Friday, June 23, 2023 • B3
May home sales rise, near record-few on the market rate in its fight against inflation. Global demand for U.S. Treasurys, which lenders LOS ANGELES — Sales of use as a guide to pricing previously occupied U.S. loans, investors’ expectahomes edged higher in May and the national median tions for future inflation and sale price posted its biggest what the Fed does with inannual drop in more than a terest rates influence rates decade, as a near all-time on home loans. low supply of available The average rate on a 30properties constrained the year home loan is still more housing market. than double what it was two Existing home sales rose years ago, when the ul0.2 percent last month from tra-low rates spurred a wave April to a seasonally adof home sales and refinancjusted annual rate of 4.3 miling. It fell this week to 6.67 percent, its third conseculion, the National Association of Realtors said tive drop, according to Thursday. That’s slightly mortgage buyer Freddie above what economists Mac. A year ago it averaged were expecting, according 5.81 percent. to FactSet. Higher mortgage rates Sales sank 20.4 percent can add hundreds of dollars compared with May last a month in costs for homeyear. That marks 10 consecbuyers on top of already high home prices. They also utive months of annual discourage homeowners sales declines of 20 percent or more. The annual drop GENE J. PUSKAR / ASSOCIATED PRESS who locked in those low rates two years ago from was steepest in markets selling — one reason the across the West and North- This is a new townhome development in Sewickley, Pa., is seen on Saturday, June 10, 2023. supply of homes for sale has east, where sales slumped “First-time buyers (are) been stubbornly low. supply at the current sales price, Yun said. more than 25 percent. are being held back by a still struggling to get into The trend will continue to pace, an improvement over Homes listed for sale in The national median persistently low inventory the market,” Yun said. be a major challenge for the the 2.9 months in April and May typically sold within home price fell 3.1 percent of homes for sale. While many homes are housing market this year, 2.6 months in May last year. just 18 days, while 74 perfrom May last year to “There’s simply not Still, in a more balanced $396,100, the NAR said. The enough inventory,” said cent were on the market for selling quickly after they hit said Danielle Hale, chief economist at Realtor.com. market between buyers and less than a month, the NAR the market, the dearth of year-over-year decline is Lawrence Yun, the NAR’s properties for sale continShe forecasts that U.S. home sellers, there is a 5- to the biggest since December chief economist. said. sales will top out at around 6-month supply. 2011, when the housing All told, there were 1.08 The combination of high ues to be a drag on sales 4.2 million this year, which The shortage of homes market was still on the million homes on the marborrowing costs and inoverall this year. mend following the midThe U.S. housing market’s would be down around 16 ket by the end of May, an in- for sale has kept the martense competition for the percent from 2022 and the 2000s housing bust. sales slump started a little most affordable homes on crease of 3.8 percent from ket competitive, driving The latest housing marthe market is keeping many more than a year ago, when fewest since 2012. The foreApril, but down 6.1 percent bidding wars in many the average rate on a 30first-time buyers on the from a year earlier, the NAR places, especially for the ket figures are more evicast also calls for U.S. home year mortgage began to sidelines. They accounted most affordable homes. prices to fall 0.6 percent for dence that even with prices said. The number of homes on One-third of the homes that for 28 percent of home sales climb from ultra-low levels the year and for mortgage declining after heading as the Federal Reserve bethe market at the end of were purchased last month last month, down from 29 rates to drop to near 6 perhigher for more than a deMay amounts to a 3-month sold for more than their list percent in April. cade many house hunters gan raising its short-term cent by the end of this year. Alex Veiga ASSOCIATED PRESS
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Average long-term U.S. mortgage rate falls to 6.67 percent ASSOCIATED PRESS LOS ANGELES — The average long-term U.S. mortgage rate fell for the third time in as many weeks, a welcome boost for homebuyers facing a housing market that’s been held back this year by a tight inventory of homes for sale. Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan fell to 6.67 percent from 6.69 percent last week. A year ago, the rate averaged 5.81 percent. The average rate on 15-year fixed-rate mortgages, popular with those refinancing their homes, also fell this week, slipping to 6.03 percent from 6.10 percent last week. A year ago, it averaged 4.92 percent, Freddie Mac said. “Mortgage rates slid down again this week but remain elevated compared to this time last year,” said Sam Khater, Freddie Mac’s chief economist. With the latest drop, the average rate on a 30-year mortgage is now at its lowest level since the last week of May, when it was at 6.57 percent. The average climbed to 6.79 percent, its highest level so far this year, in the first week of June. A decline in mortgage rates can save homebuyers hundreds of dollars a month in borrowing costs on a home loan. That can make a big difference at a time when a historic-low level of homes on the market is spurring bidding wars that are helping keep prices from falling sharply after soaring in recent years.
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