US home sales fall for 9th straight month in October | CNN Business

U.S. home sales fell for the ninth straight month in October as soaring mortgage rates and high prices drove buyers off the market. Sales of existing homes, including single-family homes, townhouses, condominiums and multi-unit dwellings, were down 28.4 percent in October from a year ago and 5.9 percent from September, according to a report released Friday by the National Association of Realtors (NAR). All regions in the US saw both month-over-month and year-over-year declines. This continues a slowdown that began in February and marks the longest decline in sales on record dating back to 1999. October sales were the weakest since May 2020, when the real estate market stagnated during the pandemic lockdown. . Moreover, last month’s trading was the weakest since December 2011. Even so, house prices continued to rise last month. According to the report, the median home price in October was $379,100, up 6.6% from a year ago. However, this is down from the all-time high of $413,800 in June. Price increases mean monthly gains over 10 years. Lawrence Yun, chief economist at NAR, said rising mortgage rates pushed more prospective homebuyers out of their mortgage eligibility in October. “The impact is greater in high-end areas and markets in the country where home prices have risen significantly in recent years,” he said. Many homeowners who have recently purchased or refinanced a mortgage with a very low interest rate are reluctant to sell. It kept inventories painfully low. According to the report, 1.22 million units were sold at the end of October, a decrease of less than 1% compared to last month and last year. At the current sales pace, it will take 3.3 months to run out of existing inventory, up from 3.1 months in September and 2.4 months last year. But it’s still at a historically low level. A balanced market is 4-6 months supply. “Some homes are still getting multiple offers because inventory levels are still low,” Yoon added. Nearly a quarter of October homes sold above their asking price, but homes that had been on the market for more than 120 days saw their prices drop by about 16%. As fewer buyers are buying homes, the average time a home stays on the market is getting longer. Properties were generally on the market from September 19th to October 21st. Prior to the pandemic, homes were typically on the market for close to 30 days. More than half of the homes sold in October were on the market less than a month ago. Across the country, prices are still rising year-over-year, but the increase is smaller than in previous years, peaking at 24% in May 2021. During the pandemic, house price growth has increased tremendously, Yoon said. Yun said half of the country could expect prices to drop annually over the next few months, most would be modest, while other regions would see larger declines. The other half, however, will increase modestly. “Cheap neighborhoods like Indianapolis, where jobs are growing, will hold up,” he said. Still, house prices nationwide are 40% higher than they were in October 2019, before the pandemic, Yoon said. “Household income has not increased by 40%,” he said. Those struggling to buy their first home continued to close and accounted for just 28% of deals last month. “First-time buyers are challenged by high prices, high standards to enter the market, and high mortgage rates.” If the barriers to homeownership improve slightly for buyers, either because prices fall or lower mortgage rates, we could face a housing shortage again, Yun said. Current homeowners aren’t selling, and homebuilders are also slowing down home construction. According to the U.S. Census Bureau and U.S. Department of Housing and Urban Development, housing starts in October, a measure of new home construction, fell 4.2 percent from September and 8.8 percent from the same period last year. “This is why more new housing needs to be built and more disused buildings to be rebuilt into residential units,” Yoon said. Average. “In the meantime, mortgage rates are falling from last month’s peak, opening the door for more homebuyers to qualify for mortgages.”

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