Kamala Harris briefs crowd in Raleigh on affordable housing plan
Democratic candidate Kamala Harris visited Raleigh, North Carolina, to talk about her economic program and affordable housing.
Home closings fell to a more than 20-year low in July as mortgage rates remained high, supply was tight and many homebuyers seemed to have simply given up hope.
The National Association of Realtors’ Pending Home Sales Index, which tracks contracts signed, fell 5.5% last month compared to June, with declines in all four regions across the country. Only the Northeast region saw higher activity compared to July 2023. The index was at its lowest level since the NAR began collecting data in 2001.
The housing market has been virtually frozen in recent years due to a rise in mortgage rates. According to Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage was about 6.84 percent in July.
But a whopping 86 percent of American homeowners have a mortgage rate below 6 percent, real estate brokerage Redfin said Tuesday. That makes it hard for many homeowners to justify selling their homes unless they absolutely have to – a phenomenon many refer to as “rate lock-in.”
Meanwhile, the median price of homes sold in July was $422,600, one of the highest ever, the NAR said in early August.
Stephen Freudenberg, an Atlanta real estate agent, says the housing market is so tight that many of his clients aren’t trying to buy anymore. “They’re kind of burned out,” he told USA TODAY. “I think everyone is just tired of the seller’s market cycle. It’s been going on for a long time.”
The pace of sales was so slow in July that supply – calculated as the ratio of homes for sale to the number of sales – rose to its best level since the pandemic began in May 2020.
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Many housing market observers are pinning their hopes on a decline in mortgage rates in line with the interest rate cut that the US Federal Reserve is expected to decide on in September.
This includes NAR chief economist Lawrence Yun, who stated in a press release: “The current lower and falling mortgage rates will undoubtedly bring buyers into the market.”
On Thursday, Freddie Mac announced that the interest rate on 30-year fixed-rate mortgages averaged 6.35% for the week ended August 29, the lowest level in nearly 18 months.
