Sales of previously occupied U.S. homes slowed for the fourth consecutive month in May as climbing mortgage rates and prices discouraged many would-be buyers.
Existing home sales fell 3.4% last month from April to a seasonally adjusted annual rate of 5.41 million, the National Association of Realtors said today.
That’s higher than what economists were expecting, according to FactSet. Sales fell 8.6% from May last year.
After climbing to a 6.49 million annual rate in January, sales have fallen to the slowest pace since June 2020, near the start of the pandemic, when they were running at an annualized rate of 4.77 million homes.
Even as home sales slowed, home prices kept climbing in May. The national median home price jumped 14.8% in May from a year earlier to $407,600. That’s an all-time high according to data going back to 1999, NAR said.
The housing market, a crucial part of the economy, is slowing as homebuyers facing sharply higher home financing costs than a year ago following a rapid rise in mortgage rates.
Average long-term U.S. mortgage rates had their biggest one-week jump in 35 years with the Federal Reserve last week raising its key rate by three-quarters of a point in bid to tame high inflation.
The 30-year rate climbed to 5.78% last week, the highest its been since November of 2008 during the housing crisis, according to mortgage buyer Freddie Mac.