Home sales inch up even as purchase loans fall to 12-year low
Home sales in the U.S. are at their highest level since December, according to the National Association of Realtors, while home purchase loans are at a 12-year-low, says real estate analyst ATTOM.
The NAR says homebuying is on an upswing, and reports a 3.2% increase in existing home sales in May over April and a 3.2% increase in sales over last year.
Meanwhile, residential lending of all types – purchase loans, refinances, and home equity loans – fell 13% nationally in the first quarter of 2026 from the previous quarter. Lending was up 5% from a year earlier, reports ATTOM.
The decline in purchase, refinance, and equity loans is “a seasonal trend we’ve seen during the start of the year over the past four years,” said Rob Barber, CEO of ATTOM. “However, purchase activity stood out with home-buying loans falling to a 12-year low, as elevated home prices and higher mortgage rates continued to strain affordability for many buyers.”
Purchase loans nationwide fell 19% from the previous quarter, marking the lowest quarterly total since 2014. Homebuying loans declined in all but two of the 200 metro areas analyzed by ATTOM.
Neighboring Arizona had the only metro areas where purchase loans increased – Yuma, Arizona (up 28.6%) and Tucson, Arizona (up 5.9%).
The median price of an existing home reached new records at both ends of the state in Nevada last month, even as sales in the south remained stagnant.
In Southern Nevada, the median price of a resale home was $490,000 in May, up 2.1% from a year ago, while the average price was just over $861,000. Las Vegas Realtors reported 2,055 homes sold last month, down 2% from April and down 1% from May 2025.
Homebuyers in Las Vegas took out 6,845 purchase loans in the first quarter of the year, down 1.8% quarter to quarter and down 14.5% year-to-year.
Las Vegas Realtor Geoff Lavell says agents in Southern Nevada are “not busy.” Buyers are constrained by economic concerns and high interest rates, while sellers, he says, are still experiencing the “lock-in effect” – a reluctance to part with what he calls “ridiculously low interest rates” that were available from 2020 to 2022.
“This is a normal market,” he says, lamenting agents who “have been licensed in the last decade are fairly spoiled on real estate. In Las Vegas, it’s been up, up, up. They don’t know how to do a price reduction.”
Inventory in Southern Nevada has remained around the 7,000 mark for much of the last year.
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First time buyers are especially challenged to find a property, says Las Vegas real estate agent Diane Varney, who notes homes in the entry level range of $400,000 are likely older and in need of repair.
“With an interest rate above 6% and faced with repairs and maintenance, potential buyers are looking at what it’s going to cost them to fix that floor or paint the house,” she says. “They already have one foot out the door.”
In Reno, 461 homes sold in May, an increase of 5.3% over last year, at a median price of $635,000, according to Sierra Nevada Realtors.
Reno homebuyers took out 1,428 purchase loans in the first quarter – down 5.7% from the previous quarter and up 9.5% over the same period last year.
“Even with mortgage rates ticking up compared to earlier in the year, they remain lower than a year ago and are essentially at the long-term historical average,” NAR’s Chief Economist Dr. Lawrence Yun told Housing Wire on Monday.
“Income gains are also outpacing home price growth by a small margin in most parts of the country,” says Yun.
The NAR’s optimism may be tempered as the Federal Reserve meets Tuesday to consider adjusting interest rates.
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Experts note that strong employment data and inflation are keeping mortgage rates elevated, with the 30-year fixed rate at 6.78%.
The Mortgage Bankers Association reports applications for new-home purchase mortgages fell 2.4% year over year in April and dropped 10% from March.
The average loan amount nationally fell from $381,938 in March to $378,384 in April.
The MBA reports government lending sources are becoming increasingly critical for homebuyers, especially those seeking new homes from builders who are attracting purchasers by buying down rates.
New home sellers in Southern Nevada are offering rates as low as 4.99%.
FHA loans made up almost 36% of applications in April, while VA loans accounted for just under 14%.
Higher interest rates not only increase mortgage payments, but also make qualifying more difficult by increasing debt-to-income ratios – the percentage of debt a borrower has in relation to their income.
The Federal Reserve Bank of St. Louis reports the rate of loan application denials was 15.1% in 2024, up from 12.2% in 2021. In that same time, mortgage rates surged from below 3.5% to more than 6.5%.
Loan applications reached more than 5.2 million in 2021 when rates were low, and fell to 3.5 million in 2023, when they peaked at 8%.
Following the mortgage crisis during the Great Recession, the Dodd-Frank Act of 2010 set the acceptable debt-to-income ratio at 43%. But an analysis by the Federal Reserve of 2024 mortgage denial rates found the true threshold is 50%.
“Research on expanding credit access should focus on debt-to income ratios of 50% to 60%, the range where underwriting constraints hold back mortgages to households,” says a blog on the Federal Reserve website.
