Some would-be homebuyers are hesitating as housing costs rise and the ongoing Iran war makes the economy feel shaky.
Fewer house hunters are going under contract to buy homes. U.S. pending home sales fell 1.5% from a week earlier on a seasonally adjusted basis during the week ending May 24, the second straight decline after four weeks of increases. Additionally, mortgage-purchase applications decreased to their lowest level since early April.
House hunters are backing off mainly because mortgage rates are rising, with the daily average hitting a 10-month high of 6.75% last week. Higher rates–along with rising home-sale prices–brought the median monthly housing payment to $2,637, the highest level in 11 months. Financial uncertainty is playing a role, too; some would-be homebuyers are jittery about making a huge purchase when the economy feels shaky and consumer confidence is at an all-time low.