The nation is witnessing a “housing recession,” says NAR Chief Economist Lawrence Yun, as existing-home sales plummeted 20% year over year in July, according to NAR data. Contract signings also dropped 20% in the same month. And there’s been a significant pullback in the new-home market—sales in the sector were down 30% annually in July—causing homebuilder sentiment to slide for the eighth straight month.

Further, “apart from rising mortgage rates, home prices continue to show double-digit year-over-year gains,” Nadia Evangelou, NAR’s senior economist and director of forecasting, writes on the association’s blog.

Homes haven’t been this unaffordable since 1989, NAR reports. Rising mortgage rates have made home loans more expensive, adding to the cost of homeownership. The typical monthly mortgage payment was nearly $2,000 in June, up 54%—or $679—compared to a year ago. “The combination of higher mortgage rates and the slowdown in economic growth is weighing on the housing market,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending Aug. 25:

*30-year fixed-rate mortgages: averaged 5.55%, with an average 0.8 point, up from last week’s 5.13% average. Last year at this time, they averaged 2.87%.

*15-year fixed-rate mortgages: averaged 4.85%, with an average 0.8 point, up from last week’s 4.55% average. A year ago, they averaged 2.17%.

Sources: magazine.realtor/daily-news/2022/08/25 and Freddie Mac