Pending Home Sales Plunge In June As Demand Is Weighed Down By Surging Mortgage Rates

There was an update on Jul 27th, 2022, 11:22am.

According to new data from the National Association of Realtors, pending home sales were down 20% in June compared to a year ago.

The drop in pending home sales from May to June was much sharper than analysts had expected.

Higher rates and rising inflation caused sales to fall in June compared to a year ago.

The average rate on a 30-year fixed loan went up to 6 percent last month, up from 3% at the beginning of the year.

Jeffrey Roach, chief economist atLPL Financial, says that the biggest factor behind the weakened housing market is the rapid rise in borrowing costs.

According to the new data, the South and West have seen the biggest year-over-year declines in sales in the last six months.

Home sales will fall in 2022, but should start to rebound early in the next decade, according to the National Association of Realtors.

As mortgage rates keep climbing, contract signings to buy a home will keep tumbling as long as that is the case. Mortgage rates could be close to a high in July. If that's the case, pending contracts should start stabilizing.

Tangent:

According to the Mortgage Bankers Association, mortgage demand fell for the fourth week in a row. The number of applications for home purchase loans fell 2% from last week.

The housing market is collapsing fast.

The housing market is going through a transition.

The housing market could be "torpedo" in the U.S.