WASHINGTON, May 11 U.S. existing home sales increased less than expected in April, and could struggle to gain altitude as mortgage rates remain elevated and rising inflation squeezes household budgets.
Home sales rose 0.2% last month to a seasonally adjusted annual rate of 4.02 million units, the National Association of Realtors said on Monday
Economists polled by Reuters had forecast home resales would rise to a rate of 4.05 million units. “Despite mixed macroeconomic signals, including a record-high stock market and historically low consumer confidence, home sales were modestly boosted by the continued improvement in housing affordability,” said Lawrence Yun, the NAR’s chief economist. Existing home sales are counted at the closing of a contract. Last month’s sales likely reflected contracts signed in February and March.
The average rate on the popular 30-year fixed-rate mortgage dropped to 5.98% in late February before jumping to 6.38% by the end of March, data from Freddie Mac showed. Mortgage rates increased in response to rising inflation, stoked by the U.S.-Israel war with Iran. The 30-year fixed rate, which vaulted to 6.46% in early April, averaged 6.37% last week.