Yesterday brought a double-barreled dose of disappointing real estate statistics. The National Association of Realtors released Existing Home Sales data for May, showing a larger than expected 2.6% drop nationally over April. Regionally, the northeast showed the largest drop, with a 6.6% decline over April. (Over the past year, the northeast has generally performed much better than other regions. So the drop in May that was larger than any other region could be the real estate slowdown catching up with the northeast.) On a year over year basis, sales were off nationally 15.5%, with the northeast down 15.8%. On the price front, the median price was down 6.1% nationally year over year, with the northeast clocking a 12.6% decline in the median.
Later in the day, Freddie Mac released its Primary Mortgage Market Survey, showing a sharp 38-basis-point jump in average interest rates on long-term loans over the past week. Average rates on 30- hit 6.63 percent compared with 6.26 percent a week ago.
Points that borrowers paid to attain these rates this week averaged
To put it in perspective, a year ago, average rates on 30 loans were 6.69 percent, about on par with today. But in 2008, rates were dropp, hitting about 5.8% in May. While rates in the upper 6% range are usually referred to as “historically low”, it is a significant jump in the cost of borrowing over just a few months ago.