After the housing bubble bust, nobody could get a mortgage. Thirteen years later, nobody wants one, sinking existing home sales to decade-low levels.
Sales of existing homes declined by 2 percent from August to September, falling to a seasonally adjusted annual rate of 3.96 million, according to a report from the National Association of Realtors. That’s the slowest pace since October 2010, according to CNBC.
Year-over-year, existing home sales dropped 15.4 percent. A year ago, the annualized rate of existing home sales was 4.68 million.
In a statement, NAR Chief Economist Lawrence Yun pointed to limited inventory and low housing affordability as reasons for the decline in sales, factors that have been hampering the housing markets throughout the year.
Yun also said the Federal Reserve “simply cannot keep raising interest rates in light of softening inflation and weakening job gains.” The comment comes on the heels of a recent letter written to the Fed by NAR, the Mortgage Bankers Association and the National Association of Home Builders, pleading for the body to pause contemplation of further interest rate hikes.
Mortgage and interest rates have been tracking parallel to one another, a problem for homebuyers struggling to make purchases with borrowing rates hanging around generational highs. Mortgage rates hit a 23-year high last week, according to the weekly MBA survey, and Mortgage News Daily reported they’re hitting 8 percent on Wednesday, the first time that threshold has been breached since mid-2000.
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Existing home sales drop 20% from last year
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Homes aren’t getting any more affordable either. For the third consecutive month, the median price of an existing home rose year-over-year, jumping 2.8 percent from last September to $394,300. All four regions tracked by NAR posted annual price increases, paced by a 5.2 percent jump in the Northeast.
Total housing inventory at the end of September was 1.13 million homes, up slightly from August but down 8.1 percent year-over-year. Unsold inventory counted for a 3.4-month supply at last month’s sales pace, up from both August and last September.