US home sales fall for 11 months, depressed by mortgage rates

Sales of existing homes in the United States like this one in Chicago have fallen due to limited inventory and high mortgage rates. Photo: SCOTT OLSON / GETTY IMAGES NORTH AMERICA / Getty Images via AFP
Source: AFP

Existing home sales in the United States have fallen for the 11th straight month, as a difficult period of limited inventory and high mortgage rates continues, according to industry data. published on Friday.

Last year also recorded the lowest annual sales rate since 2014, with the largest decline in unit sales not seen since the Great Recession, according to the National Association of Realtors. (NAR).

The interest-sensitive property sector has weakened as the Federal Reserve has begun an aggressive effort to rein in multi-year high inflation.

As the Fed raised the lending rate seven times last year to ease the economy, the cost of loans increased – driving many buyers out of the prime housing market.

“December was another tough month for consumers, who continue to face limited inquiries and high mortgage interest rates,” NAR chief economist Lawrence Yun said in a statement. .

The sale of all types of houses and buildings fell 1.5 percent from November to December, reaching an annual rate of 4.0 million, the NAR said.

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Although December prices were higher than expected on an annual basis, they are still down 34 percent from December 2021.

But Yun expects the numbers to pick up quickly when mortgage rates “decline significantly” after the end of 2022.

The 30-year fixed-rate mortgage, a popular option, averaged about 6.2 percent in mid-January, according to mortgage lender Freddie Mac.

It was lower than the month of December, although it was higher than last year.

The price of the house in this type of house is $366,900, which is more than last year.

Three out of four major regions in the country recorded a decrease in sales, and sales in the West remained unchanged, said the NAR.

Home sales now make up 90 percent of the US real estate market.

“Stocks right now look very close to the bottom,” said Ian Shepherdson and Kieran Clancy of Pantheon Macroeconomics in a report.

“The housing market will have to adjust, painfully, to a significant increase in mortgage rates,” the report said.

Source: AFP

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