U.S. Home Sales Plummet as Mortgage Rates Soar and Buyers Flee the Market
US Home Sales Plummet to 13-Year Low, While Prices Continue to Rise
US existing home sales at 13-year low; prices rise.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/BLKVNNNDW5P5PNGP2DBYLAM4J4.jpg)
Washington, Nov 21 (ANBLE) – Brace yourself, folks, because things are not looking good in the U.S. housing market. Existing home sales have plummeted to the lowest levels we’ve seen in over 13 years. You heard that right – we’re talking about numbers from back when people were still jamming to “Oops!… I Did It Again” by Britney Spears.
You might be wondering, what on earth could cause such a catastrophe? Well, it turns out that the combination of sky-high mortgage rates and a severe shortage of houses is scaring away potential buyers faster than a swarm of bees at a picnic.
But let’s not forget, it’s not just the low supply and high rates that are dragging down the market. No, no, no. We’ve also got homeowners who are clutching onto their properties for dear life, unwilling to let go of their low mortgage rates. It’s like they’re holding onto a golden goose that’s laying eggs made of low interest rates. Can you blame them?
According to Robert Frick, corporate ANBLE at Navy Federal Credit Union, all these factors have essentially frozen the housing market. It’s like a scene out of “Frozen,” but instead of Elsa singing about letting it go, we’ve got potential buyers singing, “Let us in, let us in!”
Now, let’s break down the hard numbers. In October, existing home sales plummeted a whopping 4.1%. That’s a big drop, my friends. We’re talking about a seasonally adjusted annual rate of just 3.79 million units. To put it in perspective, that’s lower than the number of people who can recite the entire alphabet backward.
- Tech Drama Unfolds: X Takes Center Stage
- From Eye-Popping Scanning Tech to OpenAI Drama Sam Altman’s R...
- Thanksgiving Shopping Bonanza: Get Ready to Open Your Wallets!
And where did these sales declines hit the hardest? Well, it seems like the Northeast, West, and le densely populated South all took a beating. The Midwest held its ground, but hey, it’s also the most affordable region, so I guess that makes sense.
Now, let’s not forget about those high mortgage rates that have been haunting the housing market like a ghost in a horror movie. The average rate on the beloved 30-year fixed-rate mortgage reached a staggering 7.79% in late October, the highest level we’ve seen since Britney Spears was singing about doing it again (oh baby, baby). Although rates have come down a bit since then, they’re still sitting at a pretty high 7.44%.
With all these challenges, it’s no wonder that Lawrence Yun, the NAR’s chief ANBLE, is rallying the troops and calling for a government tax incentive to entice homeowners to put their houses on the market. It’s like a superhero swooping in with a bag of cash, saying, “Please, oh please, sell your home and save the day!”
But here’s the real kicker. Even if mortgage rates continue to slide, affordability will remain a challenge if there’s not enough supply to meet the demand. It’s like going to a bakery and finding out they only have one loaf of bread left, and it costs a small fortune. We need more houses on the market, folks!
The inventory of existing homes has dipped to a measly 1.15 million units, down 5.7% from last year. Homeowners are hoarding their homes like a dragon guarding its treasure, with mortgage rates under 5% making them reluctant to sell. It’s like they’re sitting on a throne made of low interest rates, refusing to step down.
At the current sales pace, it would take a mere 3.6 months to run through the existing home inventory. That’s up from 3.3 months last year, but still below the desired four-to-seven-month range for a healthy housing market. We need more houses, people!
So, what’s the solution here? Well, builders need to step up and start churning out more new housing projects. Sure, borrowing costs are higher, but if they want to save the day and bring balance back to the market, it’s time to put on their superhero capes and start building!
Oh, and let’s not forget about those lucky sellers. With the supply so tight, multiple offers are becoming the norm in some areas, driving house prices through the roof. The median existing house price rose a remarkable 3.4% from last year, reaching a whopping $391,800. We’re talking about prices that could make Scrooge McDuck feel poor.
It’s not all doom and gloom, though. First-time buyers are still trying to break into the market, accounting for 28% of sales. But let’s be real, that’s not quite enough to keep the housing market party going. We need a robust 40% share to really get this party started.
Now, before we wrap this up, let’s not forget about the investors. All-cash sales represent a hefty 29% of transactions, and distressed sales (like foreclosures) are virtually unchanged from last year at 2%. It’s like a marketplace where money talks and foreclosures barely whisper.
Well, there you have it, folks. The U.S. housing market is facing some serious challenges, but it’s not all tears and sighs. We still have hope that things will turn around and the market will regain its strength. Until then, we’ll be watching and waiting, keeping our eyes peeled for any signs of change.
Let us know what you think! Are you feeling the pinch in the housing market? Have you seen any outrageous prices or crazy bidding wars? Share your thoughts and stories in the comments below!
Image Source: The Thomson ANBLE Trust Principles.
