The US real estate market is cooling rapidly

As the Federal Reserve continues to tighten monetary policy, higher interest rates and inflation hit consumers, and the U.S. real estate market is cooling rapidly. The data showed that not only the sales of existing homes fell for the fifth consecutive month, but also the mortgage applications fell to the lowest level in 22 years. According to the data released by the American Association of Realtors on July 20 local time, the sales of existing homes in the United States fell by 5.4% month on month in June. After seasonal adjustment, the total sales volume was 5.12 million units, the lowest level since June 2020. The sales volume fell for the fifth consecutive month, which was the worst situation since 2013, And it may get worse. The inventory of existing houses also increased, which was the first year-on-year increase in three years, reaching 1.26 million units, the highest level since September. On a month on month basis, inventories rose for five consecutive months. The Federal Reserve is actively raising interest rates to combat inflation, which has cooled the entire real estate market. High mortgage rates have dampened buyers’ demand, forcing some buyers to withdraw from trading. As inventories began to increase, some sellers began to cut prices. Lawrenceyun, chief economist of NAR, the American Association of Realtors, pointed out that the decline in housing affordability continued to cost potential home buyers, and mortgage rates and house prices rose too fast in a short time. According to the analysis, high interest rates have pushed up the cost of house purchase and restrained the demand for house purchase. In addition, the National Association of home builders said that the builders’ confidence index has declined for seven consecutive months, at the lowest level since May 2020. On the same day, an indicator of mortgage applications for housing purchase or refinancing in the United States fell to the lowest level since the turn of the century, the latest sign of sluggish housing demand. According to the data, as of the week of July 15, the market index of the American mortgage banking association (MBA) market index fell for the third consecutive week. Mortgage applications fell by 7% in the week, down 19% year-on-year, to the lowest level in 22 years. As the mortgage interest rate is close to the highest level since 2008, coupled with the challenge of consumer affordability, the real estate market has been cooling. Joelkan, an MBA economist, said, “as the weak economic outlook, high inflation and continuing affordability challenges are affecting buyers’ demand, the purchasing activity of traditional loans and government loans has declined