Mortgage demand and new listings are declining, too, because homeowners aren’t willing to to give up their record-low interest rates to trade up to a much higher one. Meanwhile, for potential buyers, the rates hikes means the monthly payment on a median-priced home, with a 20% down payment, is now close to $1,000 higher than it was in January.
“With wages falling behind on account of inflation, and rates rising, buyers’ purchasing power has been reduced by over $100,000,” said George Ratiu, senior economist at Realtor.com.
“As we look to the remainder of the year, we can expect interest rates to continue their upward trajectory. The Federal Reserve’s monetary tightening has not yet made a dent in inflation, which means that the bank is expected to hike its policy rate further,” he added.
Regionally, pending home sales declined 16.2% month to month in the Northeast and were down 30.1% year over year. In the Midwest, sales slumped 8.8% for the month and 26.7% from one year ago.
In the South, sales shed 8.1% for the month and plummeted 30.0% year over year, and in the West, the most expensive region in the nation, sales fell 11.7% for the month and were down 38.7% from the year before.
