A recent jump in mortgage rates is slowing homebuying activity across the United States, with pending home sales falling for a second consecutive week as affordability pressures and economic uncertainty weigh on consumers.
New data from Redfin shows pending home sales declined 1.5% during the week ending May 24 on a seasonally adjusted basis, while mortgage-purchase applications dropped to their lowest level since early April. The daily average 30-year mortgage rate climbed as high as 6.75% last week, reaching its highest level in 10 months and pushing monthly housing costs higher for prospective buyers.
The combination of higher borrowing costs and rising home prices has driven the typical monthly housing payment to $2,637, the highest level in nearly a year. Redfin analysts said some buyers are also hesitant to make major financial commitments amid broader economic concerns and declining consumer confidence.
Despite softer demand, home prices continue to rise. Nationally, the median home sale price reached $398,768 during the four weeks ending May 24, up 2.2% from a year earlier. Pending sales were still 4.7% higher than the same period last year, while new listings increased 0.5% and active listings rose 0.8%, giving buyers more options than they had in recent years.
Real estate agents say the market increasingly favors buyers, but sellers still hold an advantage in many areas due to limited inventory. With more sellers competing for a smaller pool of active buyers, agents are encouraging realistic pricing, home staging and buyer incentives such as rate buydowns or repair credits to help transactions move forward.
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