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Existing home sales sank more than economists' forecasts last month as higher interest rates and increasing prices limited the ability of potential buyers to make purchases.
The National Association of Realtors (NAR) reported existing home sales dropped 7.2% from January to an annual rate of 6.02 million. That was the lowest level since last August. Year-over-year sales declined 2.4%.
Lawrence Yun, NAR’s chief economist, said housing affordability continues to be a major challenge because of what he called the “double whammy” of rising mortgage rates and sustained price increases.
He noted some potential buyers who previously qualified at a 3% mortgage rate can’t afford one at 4%. Yesterday, Freddie Mac reported the average 30-year, fixed-rate mortgage rose above 4% for the first time since May 2019.