Existing-home sales sink as more buyers back out

“Falling housing affordability continues to take a toll on potential home buyers,” said Yun. “Both mortgage rates and home prices have risen too sharply in a short span of time.”

The average commitment rate for a 30-year fixed-rate mortgage jumped to 5.52% in June, up from 5.23% in May and 2.96% in 2021. Additionally, the median existing-home price for all housing types rose 13.4% year over year to $416,000, marking the 124th straight month of yearly increases – the longest-running streak on NAR’s record.

“Although house price appreciation will grow at a more moderate rate, home prices remain high relative to homebuyer incomes,” noted Sam Khater, chief economist of Freddie Mac. “Taken together, these factors are exacerbating affordability challenges and causing a slowdown in the housing market.”

Freddie Mac forecast house price appreciation to average 12.8% in 2022 before decelerating to 4% in 2023. Home sales are also expected to be six million this year, then decrease to 5.4 million next year.