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US April Existing Home Sales Drop

FILE: A for sale sign stands in front of a house on Oct. 6, 2020, in Westwood, Mass.
FILE: A for sale sign stands in front of a house on Oct. 6, 2020, in Westwood, Mass.

WASHINGTON - Sales of existing homes in the United States slowed again in April, the National Association of Realtors (NAR) said Thursday, marking the second straight month of declines amid higher interest rates.

Homes sales in the United States have slowed markedly over the last year as buyers contend with rising mortgage repayment costs due to the U.S. Federal Reserve's aggressive cycle of hikes.

Total existing home sales fell by 3.4 percent month-on month to a seasonally adjusted annual rate of 4.28 million in April. This was slightly higher than the median forecast of economists surveyed by MarketWatch.

Year-on-year, sales have declined by almost 25 percent, according to the NAR, underscoring the impact of the Fed's actions.

The median price for existing homes declined by 1.7 percent in April from a year ago to $388,800, fueled by retreating prices the South and West.

The National Association of Realtors said figures show the 30-year fixed-rate mortgage averaged 6.35 percent as of May 11, down slightly from a week earlier, but up significantly from 5.30 percent one year ago.

The U.S. central bank has raised interest rates by five percentage points since it began its hikes last year to try and bring inflation back down to its long-run target of two percent.

Despite the April drop, sales "remain above recent cyclical lows," NAR chief economist Lawrence Yun said in a statement, adding: "The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand."