US Home Prices Surpass $400,000 for the First Time... Purchase Transactions Decline

[Image source=EPA Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The price of houses in the United States has surpassed the $400,000 mark for the first time in history. However, due to the increased house prices and interest rate burdens, the number of purchases continues to decline.

On the 21st (local time), according to the National Association of Realtors (NAR), the median price of existing homes sold in May was $407,600 (approximately 527.24 million KRW), a 14.8% increase compared to the same month last year. This is the highest level since related statistics began in 1999. U.S. house prices have been hitting new monthly highs this year.

However, the number of existing home sales in May decreased, continuing a four-month decline. It fell by 3.4% from the previous month and 8.6% from the same month last year, reaching an annualized rate of 5.41 million units. This is the lowest figure since June 2020, right after the spread of COVID-19.

The background for this decline in transactions is interpreted as the increased loan burden due to high house prices and the Federal Reserve's rapid interest rate hikes. The mortgage interest rate in the U.S. is at its highest level since 2008.

Lawrence Yun, NAR Chief Economist, said, "Considering housing accessibility due to the sharp rise in mortgage rates this year, further declines in sales are expected in the coming months," adding, "The impact of rising loan interest rates has not yet been fully reflected in the statistics."

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