Home sales continued to slow in May, according to data released today by the National Association of Realtors. Overall, May sales of homes — which include single-family, townhomes, condominiums and co-ops — were down 1.2 percent from April and 6.6 percent from last May. In the Washington region, home sales slumped even more, sliding 13 percent from May 2005.
It is Washington and other higher-priced markets that are feeling the pinch the most, said Realtor chief economist David Lereah.
“There’s now a clear pattern of slower home sales activity in many higher-cost markets, which are more sensitive to rises in interest rates, and higher home sales inmoderately-priced areas which have experienced job growth,” he said. “Although mortgage interest rates remain historically low, the up-trend in interest rates this year is affecting those buyers who are at the margins of affordability.”
The average interest rate on a 30-year, fixed-rate mortgage rate is at 6.6 percent, according to Freddie Mac. That’s up from 5.72 percent last May.
Home sales continue to slow, said Walt Molony, a spokesman for the National Association of Realtors, in part because appreciation rates are slowing. Homes prices are expected to appreciate by about 5.3 percent this year.
“That’s a bit cooler than people are used to, but it’s still above historical norms,” Molony said. “And the Washington area will probably remain above that.”
