Prospective homebuyers in the United States continue to remain on the sidelines amid all-time high prices. Real estate brokerage Redfin recently released a report that shows home sales in the U.S. are approaching their lowest level in a decade.
The home sales in May dropped by 1.7% compared to April, and 407,959 homes sold were 2.9% less than in the same period in 2023. In the past decade, there were only two months—May 2020 and October 2023—with lower home sale numbers.
At the same time, home prices are at an all-time high, with the median home sale price standing at $394,000. This is a 4.4% year-over-year increase and biggest uptick in the past three months. Mortgage rates are also on the rise, with a 30-year-fixed mortgage coming at 7.06%.
“Sales are sluggish because high homebuying costs are making both house hunters and prospective sellers skittish. And with so few homes for sale, buyers in some markets are getting into bidding wars, which is helping push home prices to record highs,” said Elijah de la Campa, Senior Economist at Redfin.
Redfin predicts that mortgage rates will decline this summer due to cooling inflation. This could increase home-buying activity and provide another boost to home prices.