Home sales drop for 9th month

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Home sales in the United States fell for a ninth straight month in October as rising mortgage rates and high prices pushed buyers out of the market.

Existing home sales — which include single-family homes, townhouses, condominiums and co-ops — fell 28.4% in October from a year ago and 5.9% from September, according to a report released Friday by the National Association of Realtors. All regions of the United States saw month-over-month and year-over-year declines.

That continues a slowing trend that began in February and marks the longest streak of falling sales on record, stretching back to 1999.

Sales in October were at their lowest since May 2020, when the real estate market ground to a halt amid the pandemic lockdowns. In addition, last month’s sales were the weakest since December 2011.

Still, house prices continued to rise last month. The median home price was $379,100 in October, up 6.6% from a year ago, the report said. But that’s less than the all-time high of $413,800 in June. The price increase marks more than a decade of annualized monthly gains.

“More potential homebuyers went non-eligible for a mortgage in October as mortgage rates rose higher,” said Lawrence Yun, chief economist at NAR. “The impact is greater in high-end parts of the country and in markets that have seen significant house price increases in recent years.”

Many homeowners who have recently purchased or refinanced ultra-low mortgage rates are hesitant to sell. That has kept the stock painfully low.

At the end of October, there were 1.22 million units on sale, less than 1% less than last month and last year, according to the report. At current sales rates, it would take 3.3 months to get through existing inventory, compared to 3.1 months in September and 2.4 months last year. But that’s still historically low: a balanced market is a 4-6 month supply.

“Inventory levels are still tight, which is why some homes for sale are still getting multiple offers,” Yun added.

While nearly a quarter of homes sold above asking price in October, prices of homes that had been on the market for more than 120 days fell by about 16%.

With fewer buyers looking for homes, the average time a home stays on the market is getting longer.

Property was usually on the market for 21 days in October, compared to 19 days in September. Pre-pandemic homes were usually on the market for closer to 30 days. More than half of the homes sold in October were on the market for less than a month.

While prices are still rising year-on-year nationally, the increase is smaller than in recent years, with annual home price increases peaking at 24% in May 2021.

And some markets are even seeing prices fall, especially areas where house prices have soared during the pandemic, Yun said.

Half of the country can expect prices to fall year over year in the coming months, Yun said, most will be by a modest amount, while other areas will see bigger drops. But the other half is likely to see a modest increase.

“Affordable areas will hold, like Indianapolis, where there is job growth,” he said.

Still, Yun said, house prices nationally are 40% higher than they were in October 2019, before the pandemic.

“Family income has not increased by 40%,” he said.

Those struggling to buy their first home continued to be left out, making up just 28% of transactions last month.

“Starters really have trouble with high prices, the high threshold to enter the market and high mortgage interest rates.”

Once the homeownership hurdle improves a bit for buyers — either with falling prices or lower mortgage rates — we could face a housing shortage again, Yun said, as the number of new listings coming to market is now lower than a year ago .

Current homeowners are not selling and homebuilders are also slowing home construction.

According to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, October housing starts, a measure of new home construction, fell 4.2% from September and 8.8% from September. a year ago.

“That’s why more new housing construction is needed, as well as more rehabilitation of disused buildings into housing units,” Yun said, noting that while apartment building construction remains robust, single-family home starts less than a year ago and well below historical averages.

“Meanwhile, mortgage rates are falling from last month’s peaks and the gate is opening for more homebuyers to qualify for a mortgage.”

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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