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Why are home sales declining in the US?
Home sales in the US are declining due to a combination of high mortgage rates and economic uncertainties. In May 2025, pending home sales cancellations rose to 6%, indicating buyer hesitance. Additionally, new home sales dropped by 13.7%, reflecting the struggles many buyers face in affording homes amidst rising costs.
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What factors are affecting the housing market right now?
Several factors are currently impacting the housing market, including elevated mortgage rates, which have made homeownership less affordable for many. Economic uncertainties, such as inflation and job market fluctuations, are also contributing to a cautious approach from potential buyers, leading to a slowdown in sales.
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What can homebuyers expect in the coming months?
Homebuyers can expect a challenging market in the coming months, with high mortgage rates likely to persist. As inventory of unsold homes increases, it may shift towards a buyer's market, potentially leading to price adjustments. However, buyers should remain cautious due to ongoing economic uncertainties.
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How do high mortgage rates impact home sales?
High mortgage rates significantly impact home sales by increasing the overall cost of homeownership. As rates rise, many potential buyers find themselves priced out of the market, leading to decreased demand. This can result in longer selling times and increased cancellations of pending sales, as seen in recent data.
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Is it a good time to buy a home in the current market?
Given the current economic climate and high mortgage rates, it may not be the best time for many to buy a home. Prospective buyers should carefully evaluate their financial situation and consider waiting for more favorable conditions, such as lower rates or improved economic stability.
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What should sellers do in a declining market?
Sellers in a declining market should be prepared for longer selling times and potentially lower offers. It may be wise to price homes competitively and consider making improvements to attract buyers. Staying informed about market trends can also help sellers make strategic decisions.