As homebuyers battled with dramatically higher mortgage rates, rising home prices, and a still-scarce supply of properties, sales of previously occupied homes in the United States declined in September for the eighth consecutive month, matching the pre-pandemic sales pace from 10 years ago.
According to the National Association of Realtors, existing home sales dropped 1.5% from August to a seasonally adjusted annual pace of 4.71 million last month.
According to FactSet, that’s a little higher than economists had anticipated.
Excluding the sharp decrease in sales in May 2020, close to the onset of the pandemic, sales are currently at the weakest yearly pace since September 2012, a 23.8% decline from the same month last year.
In September, compared to a year earlier, the national median home price increased by 8.4% to $384,800.
The housing market has slowed down this year due to increased mortgage rates. According to mortgage buyer Freddie Mac, the average rate on a 30-year home loan increased last week to 6.94%, the highest rate since April 2002.
The rate was 3.09% on average a year ago.
Fewer people can afford to purchase a home due to higher mortgage rates that lower purchasers’ purchasing power.
The 10-year Treasury yield has been growing amid expectations that the Federal Reserve would keep raising interest rates to reduce inflation, and mortgage rates have increased dramatically along with it.
This week, the 10-year yield climbed to its highest since June 2008.
Increased home loan rates prevent homeowners who secured an extremely cheap rate in the previous couple of years from purchasing a new home and making homes less affordable overall.
As a result, the number of houses up for sale may be constrained.
According to NAR, there were 1.25 million properties for sale as of the end of September, which is a decrease of 0.8% from September 2016 and 2.3% from August.
Homes typically sold 19 days after the market last month, compared to 16 days in August.
Homes frequently sold more than 30 days after going on the market before the pandemic.
According to Yun, the inventory of homes for sale represents a 3.2-month supply at the current sales rate.
That has not altered since August.
There is a 5- to 6-month supply in a market where buyers and sellers are more evenly distributed.