Makes sense. Even though rates are incredibly low, they’re significantly higher than last spring. It’s the delta.

“Changes in fundamentals such as rising mortgage rates can account for much of the sluggishness in existing home sales over the past year,” Krainer said. Home resales have slowed sharply since the second half of 2013, declining in seven of the eight months through March. They peaked in July.

Mortgage rates started trending higher last May in anticipation of the Federal Reserve scaling back its monthly bond-purchasing program. The 30-year fixed rate increased by about a percentage point from last May, when it was 3.54 percent, to its most recent peak of 4.49 percent in September. It has since dropped to average about 4.34 percent in April.

On the good side, he thinks, “As the moderate recovery continues and these factors begin to dissipate, all forms of housing market activity, including existing home sales, should post more solid growth.”

Full article.