Analyses from the National Association of REALTORS indicates that home sales have slowed, likely driven by recent announcements in the Federal reserve benchmark interest rates, which typically drive mortgage rates and homeowner affordability measures.

The peculiar real estate market of 2020-22 has generated hard-to-predict outcomes in housing markets… but the latest turn may not have been so hard to forecast. With most prospective homeowners borrowing through a mortgage to buy a home, interest rates become a key ingredient to a given person’s “buying power.” With the recent announced increase in benchmark interest rates by the Federal Reserve, a follow-through reaction seemed inevitable.

Enter the latest data from REALTORS, through their website news feed:

Home sales are falling from their pandemic-fueled highs as home buyers tighten up their budgets. “Home sales have essentially returned to the levels seen in 2019—prior to the pandemic—after two years of gangbuster performance,” says Lawrence Yun, chief economist for the National Association of REALTORS®. Movement in both single-family and condo sales are nearly equal, Yun adds, “possibly implying that the preference toward suburban living over city life that had been present over the past two years is fading, with a return to pre-pandemic conditions.”

Total existing-home sales—completed transactions for single-family homes, townhomes, condos, and co-ops—dropped 3.4% month over month in May, reaching a seasonally adjusted annual rate of 5.41 million, according to NAR’s latest home sales report. Existing-home sales are down 8.6% compared to a year ago.

As of this week, mortgage rate information from Freddy Mac shows the average 30-year mortgage rate approaching 6%, in contrast to the levels around 3% through most of 2021.

For more news and information about the real estate sales market and more, visit the National Association of REALTORS website.