Besides, it is the slowest pace since November 2015. Sales were 19.9% ​​lower than in August 2021.

With inflation still high, the Fed may be a long way from stopping hiking The sales figures represent closings, so contracts likely signed in June and July, when mortgage rates rose and then fell. The average interest rate on the popular 30-year fixed mortgage started June at about 5.5% and then jumped above 6% in the middle of the month, according to Mortgage News Daily. It then retreated a bit, staying in the 5.7% range for most of July before falling further into the low 5% range at the end of the month. The 30-year fixed started this year at 3%. It is now close to 6.5%. Even with interest rates making housing even less affordable, prices were still higher than a year ago. The median price of an existing home sold in August was $389,500, up 7.7% from a year ago. House prices historically fall from July to August due to seasonality, but this year’s decline was larger than usual, suggesting a significant easing. From June to August, prices usually fall about 2%, but this year they have fallen about 6%. “The housing market is seeing an immediate impact from changes in monetary policy,” said Lawrence Yun, chief economist at Realtors, noting that it will further revise its annual sales forecast due to higher mortgage rates. “Some markets may see prices drop.” Sales were down across all price categories, but more sharply at the lower end. Sales of homes priced between $250,000 and $500,000 fell 14% year-over-year, while sales of homes priced between $750,000 and $1 million fell just 3%. A lot of that has to do with supply, which is tighter at the lower end of the market. Prices continue to be supported by tight supply. There were 1.28 million homes for sale at the end of August, unchanged from a year ago. At the current sales rate, this represents 3.2 months of supply. “In July, we saw the first sign that the renewed housing market may be weighing on homeowners’ willingness to sell, and that hesitancy continued in August as the number of new home listings fell 13%,” said Danielle Hale, head economist for Realtor.com. Homebuilders are retreating amid falling demand, but there was a slight uptick in single-family home starts in August, according to the US Census. This may be due to a brief drop in mortgage rates during the period, which generated more interest from buyers. But building permits, an indicator of future construction, fell as mortgage rates were expected to rise again.