Sales of existing homes in the United States in April recorded astill a decline like in March. The index, compiled by the National Association of Realtors (NAR), the industry association fell 1.9% from the previous month to an annualized rate of 4.14 million units. Analysts expected the figure to be 4.24 million. Compared to the same period of the previous year, sales fell by 1.9%.
The median price of an existing home rose from a year earlier by 5.7% to $407,600. It would take 3.5 months to completely exhaust the homes available for sale. For Lawrence Yun, chief economist at NAR, “these mortgage rates, which represent an increase of 300 basis points compared to the pre-Covid pace” lead into uncharted territory where it is necessary to verify how much “the lock-in effect will slow down home sales” .
Fed: rates high for longer than expected, inflation disappoints
Recent data on US inflation “did not increase confidence in progress towards 2% and, consequently, indicated that the disinflation process is likely to take longer than previously thought”. This is what we read in the minutes of the the last monetary policy meeting of the Federal Reserve of April 30th and May 1st, which decided unanimously among the participants maintaining reference rates in the range between 5.25 and 5.5%.
US monetary policy makers “discussed maintaining the current restrictive policy for a longer period if inflation did not show signs of sustainable movement towards 2%”, the minutes read. Furthermore, “several participants mentioned a willingness to tighten policy further should inflation risks materialize in a way that makes such action appropriate.”
