Despite Massive Increase in Mortgage Rates, Sales Are Skyrocketing

Despite Massive Increase in Mortgage Rates, Sales Are Skyrocketing

The Housing Market Continues To Heat Up Despite Rising Inflationary Pressure

( – Although mortgage rates have been steadily on the rise in recent months, the National Association of Realtors (NAR) reported a six-month pending sales increase of existing homes in May of 0.7%. The monthly number showed people are still looking to buy homes in the US, although they will pay a bit more in interest.

The Northeastern corner of the United States saw the largest jump at 15.4% in pending sales waiting to close in May, but fell significantly in year-over-year numbers.

Since May 2021, real estate transactions have fallen 13.6% overall, mainly because mortgage rates are higher than they were a year ago. NAR Chief Economist Lawrence Yun stated the housing market is experiencing a shift. He said the Fed’s move to increase interest rates is hurting people looking to buy homes. Yun suggested a better idea to stabilize the market would be to increase the supply. The current lack of homes for sale, coupled with high-interest rates is preventing buyers from making the move. Unfortunately, the Federal Reserve Bank of Dallas predicted a housing bubble as values continue to soar.

Pending home sales in the Midwest had a modest year-over-year drop of 1.7%, while the West saw a decrease of 5% and the South contracted by 13.8%.

The association will report June home sale numbers on July 20 and the Pending Home Sales Index on July 27. Those numbers will give homebuyers and sellers a better idea of the direction of the real estate market and their future chances of homeownership.

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