From the Street:
The latest news out of the housing market isn’t good. Mortgage rates are soaring, and sales are dropping.
The one puzzler is what’s happening with prices.
“Fixed mortgage rates have increased by more than two full percentage points since the beginning of the year,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
Existing-home sales fell for the fourth straight month in May — 3.4% from April and 8.6% from a year ago, according to the National Association of Realtors.
“Home sales have essentially returned to the levels seen in 2019 — prior to the pandemic — after two years of gangbuster performance,” NAR Chief Economist Lawrence Yun said in a statement.
However, prices aren’t behaving intuitively, yet.
The median existing-home price hit $407,600 in May, up 14.8% from May 2021. This marks 123 consecutive months of year-over-year increases, the longest streak in NAR records.
“Those of us who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer,” Craig Lazzara, managing director at S&P DJI, said in a statement. “The strength of the [data] suggests very broad strength in the housing market, which we continue to observe.”