Rosalind Evans
In a startling downturn, home sales across the United States have plummeted to their lowest point in thirteen years this October, as the National Association of Realtors reported. The figures are alarming—only 3.79 million units sold at a seasonally adjusted annualized rate, marking a 4.1% decline from September and an even more significant 14.6% drop from the previous year. These sales figures, rooted in transactions most likely initiated in August and September, come as potential buyers grapple with a challenging housing market landscape.
The cause of this slump can be partly attributed to the surge in mortgage rates, which soared past 8% in mid-October, though they dipped near 7% at the end of August. This escalation in borrowing costs has made the dream of homeownership more elusive, especially as the housing inventory continues to shrink. Lawrence Yun, the Chief Economist for the National Association of Realtors, encapsulates the dilemma: “Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation.”
Despite the downturn in sales, housing prices have not waned. October saw the median price of an existing home rise to $391,800—a 3.4% year-over-year increase. This price inflation is a nationwide trend, indicating that sellers in all regions benefit from market conditions. Yun observes that homeowners have seen their housing wealth surge by over $100,000 in just three years, reflecting the robust price growth.
Closing the report, it’s evident that the housing market presents a mixed bag. While sales are down, with first-time buyers still struggling to make their mark in the market, the high-end segment shows resilience. The disparity in the market dynamics underscores the complexity of the housing sector, affected by both economic factors and shifting demographics.
