Weekly Mortgage Rates Fall, But Existing Home Sales Sag

Decline in Mortgage Rates: The average rate on the 30-year fixed-rate mortgage fell to 6.87% in the week ending May 23, marking an 11 basis points drop from the previous week. While this decline is notable, it has not translated into a surge in home sales as one might expect. Joel Kan, deputy chief economist for the Mortgage Bankers Association, highlights the continued lag in purchase activity despite the recent rate decrease. Slump in Home Sales: A combination of high mortgage rates, inflated prices, and limited inventory has weighed heavily on home sales in April. According to the National Association of Realtors, existing home sales reached an annual pace of 4.14 million dwellings, reflecting a 1.9% decline compared to both the previous month and the previous April. This downward trend raises concerns for sellers as the crucial four-month homebuying season commences. Buyer Reluctance: While sellers have been proactive in listing their homes ahead of the spring shopping season, buyers have been hesitant to enter the market due to the sharp increase in mortgage rates during March and April. Despite the recent decline in rates, they still remain slightly higher than the levels seen earlier in the year. This hesitancy among buyers dampens the prospects for a robust start to the homebuying season.