According to data published on Thursday by the National Association of Real Estate Agents (NAR), housing sales increased 0.3% to 71.2 points during the past month; however, experts warn that this unexpected improvement could be temporary in the wake of the shooting of mortgage rates in the last few weeks.
Lawrence Yun, the NAR’s chief economist, commented that “at the national level, the signing of contracts today is approximately 30% below the levels of the years prior to the pandemic,” he told Reuters.
And in recent months, the fluctuation in mortgage rates has caused both owners and future buyers to remain on the margins of the market expecting greater stability, which has caused a fall in housing demand.
“Transaction activity reached its peak in 2021, when mortgage interest rates fell to close to 3 percent, a record low, and has not reached that level since then,” said Yun.
The NAR report also detailed that outstanding housing sales fell 4.7% year-on-year last month, and the regions where contracts dropped the most were the Northeast and Middle West, while, in the South and West, a slight increase was noted.
The sales sector has not only been affected by higher mortgage rates, but also by the lack of inventory that has caused an exponential rise in housing prices.
On the other hand, a report on the construction sector was released on Thursday that surprisingly increased 7.6% in the construction of single-family housing in August to reach 918,000 units in its annual rate.
However, experts suggest that this improvement could also be temporary, as the sector has been heavily affected by the high prices of construction materials in the face of high tariffs and inflation, as well as labor shortages due to strong migration policies.
