Weekly Mortgage Rates Fall, But Existing Home Sales Sag

This article was first published on NerdWallet.com.

In what should be a reassuring display of good timing, mortgage rates fell for the third week in a row — right at the start of homebuying season.

But mortgage rates are still too high for the comfort of many would-be buyers. That seems to be why home sales stumbled in April, and they might not be much better in May.

The average rate on the 30-year fixed-rate mortgage dropped to 6.87% in the week ending May 23, according to rate information provided to NerdWallet by Zillow. It was a decline of 11 basis points from the previous week. (A basis point is one one-hundredth of a percentage point.)

A slump in home sales in April

The 30-year mortgage has fallen almost half a percentage point in three weeks. If you think this decline means real estate agents are gleefully slapping "Sold" stickers on oodles of "For Sale" signs, sorry to disappoint you.

"Purchase activity continues to lag despite this recent decline in rates," said Joel Kan, deputy chief economist for the Mortgage Bankers Association, in a news release. This slowdown is a continuation of a worrisome trend.

A combination of high mortgage rates, elevated prices and scant...