Sherif Adel (Washington) In a sign that the US real estate bubble is about to burst after years of recovery, the number of homes for sale in the United States last week increased significantly compared to the same period last year, after high US interest rates and exaggerated house prices caused For sale, buyers are reluctant for the first time in at least five years. On Thursday, Realtor.com, which is one of the two largest sites to promote real estate sales in the United States, said that the rise in interest applied to mortgage loans caused a decline Sales, for homes offered for sale last week, increased by 9% compared to the same week last year, which is the largest increase since the company began tracking the numbers of those homes in 2017. The data issued by the famous site coincided with the issuance of another report from the real estate brokerage company Radfin confirms the increase in the number of houses added to the list of offered for sale during the four-week period ending in mid-May, at a rate close to double the rate of increase during the same period of the year for my past.
Mortgage Loans
“The rise in mortgage interest rates has caused major shifts in the housing market, prompting home sellers to seek a buyer ahead of time,” Daryl Fairweather, the company’s chief economist, told CNBC. to reduce demand further. The significant drop in US interest rates, and the trillions of cheap dollars that were injected into the US economy in the wake of the emergence of the Covid-19 virus and the issuance of major closure orders in most US states in 2020, caused interest on mortgage loans to drop to its lowest level since it began to be recorded before Almost half a century. The interest rate on this type of loan for a period of thirty years touched 2.5% in some transactions during the past two years, which helped millions of Americans to buy a new home, and caused real estate prices to rise in an unprecedented way.
monetary tightening
With the Federal Reserve heading to follow restrictive policies, including raising interest rates on its money and stopping its purchases from the secondary market of bonds, the rate of return on US 10-year Treasury bonds, the most influential in the pricing of mortgage loans, has risen, exceeding 3.15% for the first time since 2018. According to According to the US Census Bureau, sales of newly built homes fell during the month of April by 16% compared to the previous month.
In a related context, pending sales, which measure the number of signed home sales contracts, decreased by 4% compared to March, and by 9% compared to April of last year, to be the sixth consecutive month that witnessed a decline in sales. It is currently experiencing its slowest growth rate in nearly a decade.
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