Sales of existing homes in the United States fell in June for the fifth month in a row, buyers being cooled by the rapid rise in interest rates and by prices, which themselves reached a new record. In June, 5.12 million houses and apartments at an annualized rate changed owners, 5.4% less than in May and 14.2% less than in June 2021, according to data published Wednesday by the Federation National Association of American Realtors (NAR). This is the lowest number of transactions since June 2020. It is also much less than expected, since analysts were expecting 5.40 million sales.
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Prices continue to rise, although at a slower pace, and the median selling price reached 416,000 dollars, a new record (+13.4% over one year). “The combination of higher prices and higher interest rates has clearly changed the dynamics of the real estate marketsaid Lawrence Yun, chief economist of NAR, during a press conference call. As a result, the number of properties for sale began to rise in June, for the first time in three years. Thus, 12.6 million properties were available at the end of June (+9.6% over one month, +2.4% over one year). “There are, finally, more properties on the marketMr. Yun greeted. The too low number of properties for sale compared to the strong demand had indeed slowed the expansion of the market.
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The real estate sector had largely benefited from the Covid-19 crisis. Historically low interest rates, the solid savings that many American households had, as well as their desire for space and greenery driven by teleworking, had caused demand and prices to jump. But since the beginning of the year, interest rates have risen sharply and quickly, reaching 5.51% over 30 years, against less than 3.00% a year earlier. Mortgage applications fell in mid-July to their lowest level since 2000, the Mortgage Bankers Association announced on Wednesday. On the new home side, housing starts tumbled 11.9% in May and 2.00% in June, according to Commerce Department data. And builder morale fell in July to the lowest since May 2020, even reaching one of its worst levels on record, according to the monthly HMI index from the National Association of Builders (NAHB) and the bank. Wells Fargo.
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