Agreements to purchase existing homes across the United States dropped sharply in June, as rising mortgage costs and record-high home prices kept many would-be buyers from moving forward with purchases.
The National Association of Realtors announced Thursday that its pending home sales index fell 5.4% last month, landing at 72.5. That was a much steeper decline than the 0.5% drop that economists surveyed by Reuters had anticipated. Pending sales — which typically turn into completed transactions within one to two months — declined across all four regions of the country and were down 0.3% compared to June of the previous year.
Looking ahead, mortgage rates are expected to stay elevated in part due to renewed tensions between the United States and Iran, which flared up following the breakdown of a fragile ceasefire last week.
Lawrence Yun, the NAR’s chief economist, pointed to a combination of factors making the market particularly tough right now. “The highest mortgage rates in nearly a year and the record-high national median home price together are contributing to a tepid housing market that is especially difficult for first-time homebuyers,” he said.
