- Home sales decline in October for the ninth month in a row.
- Sales of previously owned homes fell 5.9% from September to October, according to the National Association of Realtors.
- This is the lowest rate since December 2011, with the exception of a very short drop at the start of the Covid-19 pandemic.
Home sales declined for the ninth straight month in October as higher interest rates and rising inflation kept buyers out.
Sales of previously owned homes fell 5.9% from September to October, according to the National Association of Realtors. This is the lowest rate since December 2011, with the exception of a very short drop at the start of the Covid-19 pandemic.
October data showed seasonally adjusted year-on-year sales of 4.43 million units. Sales were down 28.4% year on year.
Even though sales are slowing down, supply is still low. At the end of October, 1.22 million homes were sold, a decrease of just under 1% both month-on-month and year-over-year. That’s a 3.3-month supply at current sales rates. The historically balanced market is considered to be a six-month supply.
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The median price of an existing home sold in October was $379,100, up 6.6% from a year earlier. The rise in prices, however, is shrinking as the seasonal drop in house prices seems to be much deeper than usual at this time of the year.
“Inventory levels are still tight, so some homes for sale are still getting a few offers,” said Lawrence Yun, chief economist at NAR. “In October, 24% of homes received a price higher than the asking price. Conversely, prices for homes that have been on the market for more than 120 days have fallen by an average of 15.8%.
Overall, houses were contracted in 21 days in October, compared to 19 days in September and 18 days in October 2021. More than half, 64% of homes sold in October 2022, have been on the market for less than a month, suggesting there is still strong demand if the home is priced correctly.
While sales are now falling across all price brackets, they weaken the most in the $100,000 to $250,000 range and in the $1 million range. On the low end, this is likely due to the acute shortage of affordable homes in this price range. Large losses in the stock market, as well as inflation and global economic uncertainty, can put pressure on high-value buyers.
First-time buyers, who are likely the most sensitive to higher mortgage rates, accounted for just 28% of sales compared to 29% a year earlier. This group typically accounts for 40% of home purchases. Investors or existing homebuyers retreated, buying just 16% of homes sold in October, up from 17% in October 2021.
Mortgage rates are now more than double the record lows seen just earlier this year. But recent rate volatility is also hurting potential buyers. Rates jumped in June, stabilized in July and August, and continued to rise even higher in September and October. Then they plummeted again last week.
“For many, the weekly volatility of mortgage rates alone that in 2022 there were three times more than was typicalcould be a good reason to wait,” said Daniella Hale, chief economist at Realtor.com. know how to set and stick to a budget.”
Credit: www.cnbc.com /