Part 3/6:
In the backdrop of these fluctuating sales figures was the steady increase in mortgage rates. The average rate for a 30-year fixed mortgage maintained a relatively stable rate in March; however, it surged beyond 7% in April. This spike in borrowing costs appears to have contributed to hesitance among buyers, impacting demand significantly.
Conversely, the supply of homes for sale showed a notable increase, with 1.54 million units available at the end of May—a staggering 20% increase from the previous year. At the current pace of sales, this translates into a 4.6-month supply of homes, which, while representing an increase in availability, still remains on the lighter side historically. The combination of increased supply and rising prices continues to pressure the market dynamics.