Potential existing-home sales decreased to a 5.5 million seasonally adjusted, annualized rate (SAAR), according to new data from First American Financial Corporation
. This represents a 1.9 percent decline compared with a year ago, a decline of 107,000 (SAAR) sales.
First American also determined that the market existing-home sales is underperforming its potential by 0.2 percent or an estimated 9,500 (SAAR) of sales, which is the smallest performance gap in the last 18 months. Last month’s revised underperformance gap was two percent or 117,000 (SAAR) sales.
“While higher mortgage rates did reduce the market’s potential, they also will have the positive effect of moderating house price appreciation,” said Mark Fleming, chief economist at First American. “More troubling is the lack of homes for sale, which is causing a ‘matching-trap’ where current homeowners are reluctant to sell because of concerns about the ability to find a home to buy and the likelihood that their new mortgage will have a higher rate than their existing mortgage.”