US home sales fell again in April

Existing-home sales in the United States declined again in April, according to the National Association of Realtors (NAR), marking the second consecutive month of reductions amid increased loan rates.

Existing home prices fell the most year on year since 2012.

But sales “remain above recent cyclical lows,” NAR chief economist Lawrence Yun said in a statement, adding: “The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.”

Homes sales in the United States have slowed significantly in the previous year as buyers deal with increased mortgage payback expenses as a result of the US Federal Reserve’s aggressive rate hike cycle.

Since beginning its hikes last year, the US central bank has lifted interest rates by five percentage points in an attempt to bring inflation back down to its long-run target of two percent.

In April, total existing home sales decreased by 3.4 percent month on month to a seasonally adjusted annual pace of 4.28 million. This was slightly higher than the consensus expectation of MarketWatch’s economists polled.

Year-on-year, sales have declined by almost 25 percent, according to the NAR, underscoring the impact of the Fed’s actions.

“While resilient demand will provide some support, we think home sales will come under increasing pressure as the year progresses, with sales weighed down by a weakening economy and labor market and a persistent shortage of inventory,” Oxford Economics lead US economist Nancy Vanden Houten wrote in a note to clients.

The median price of existing homes fell 1.7 percent year on year in April to $388,800, the steepest drop in more than a decade, owing to falling prices in the South and West.

According to the NAR, the 30-year fixed-rate mortgage averaged 6.35 percent as of May 11, down marginally from a week earlier but much higher than 5.30 percent a year ago.

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