[Music] Fewer people are buying homes in the US That's according to the latest report From the Commerce department sales of New single family homes dropped Unexpectedly by 11.3% in May that's a Six-month low the National Association Of Realtors says home contract signings Have also hit a record low so joining me Now to break this down and say talk About what it means uh for potential Home buyers is darl Fairweather she is The chief economist for the real estate Company red fin thanks for joining us so We've been talking about this for a While now that you know that home sales Are down and but may is supposed to be When things kind of take a turn because During the springtime is when a lot of People start shopping so what are some Of the factors uh that economists say Maybe driving down Demand to do with mortgage rates Mortgage rates had a record low during The pandemic which meant homeowners were Able to refinance and they don't want to Give up those low rates and for buyers Those High rates means that borrowing to Buy a home is very expensive and at the Same time prices are high and inventory Is low so it's a very challenging Market All around so prices still remain high Because of the low inventory is that It yes because there isn't much Supply
Even though there isn't much demand There still are high prices in the Market so then you know what needs to be Done because this is contrary to the way Things normally go usually when interest Rates are high home prices go down so Purchasing a house becomes more Attainable and more desirable what needs To Change well the 30-year fixed rate Mortgage created a lot of security in The housing market which insulated Homeowners from these changes in Interest rates but what that means is That when interest rates are high There's no motivation for homeowners to Try to sell it just puts the housing Market into a freeze which is what we're Experiencing right now and it's because Rates went up so fast so high in such a Short amount of time that the housing Market Market is really in a strange Place we've never been in before so we Were talking about the numbers in May But there's reports are now showing that The number of available us homes for Purchase actually Rose a bit in April so Could that have an impact and be some Good good news for potential home Buyers it is a silver lining that Inventory is starting to improve and We're starting to see some softening and Prices with homes starting to sell for Under asking price and the first time in
A long time so that's a little bit of Good news for buyers the market is Starting to loosen up a bit right so Maybe wait a little maybe you know you Thought about buying a house in the Spring maybe wait till August and you Might get some sellers that are a little Anxious about unloading their property And you might get a good deal uh fingers Crossed go ahead oh I think in August Rates might be lower but there's gonna Be more competition so if you wait it's A risk all right Daryl Fairweather thank You so much
