B4 • Friday, October 21, 2022
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U.S. HOME SALES FALL AGAIN September makes the eighth straight month Alex Veiga ASSOCIATED PRESS Sales of previously occupied U.S. homes fell in September for the eighth month in a row, matching the pre-pandemic sales pace from 10 years ago, as house hunters grappled with sharply higher mortgage rates, rising home prices and a still tight supply of properties on the market. The National Association of Realtors said Thursday that existing home sales fell 1.5 percent last month from August to a seasonally adjusted annual rate of 4.71 million. That’s slightly higher than what economists were expecting, according to FactSet. Sales fell 23.8 percent from September last year, and are now at the slowest annual pace since September 2012, excluding the steep slowdown in sales that occurred in May 2020 near the start of the pandemic. The national median home price rose 8.4 percent in September from a year earlier to $384,800. The housing market has been slowing this year because of rising mortgage rates. The average rate on a 30-year home loan rose to 6.94% this week, the highest
GENE J. PUSKAR / ASSOCIATED PRESS FILE
This is a home in Mount Lebanon, Pa., under contract, on Thursday, Oct. 17, 2022. Sales of previously occupied U.S. homes fell in September for the eighth month in a row, though the decline was the most modest yet since the housing market began to cool amid sharply higher mortgage rates. rate since April 2002, according to mortgage buyer Freddie Mac. A year earlier, the rate averaged 3.09 percent. Higher mortgage rates reduce homebuyers’ purchasing power, resulting in fewer people being able to afford to buy a home. Consider, a buyer who got a 3 percent rate on a 30year mortgage to buy a $300,000 home last year would only be able to borrow $190,000 today for
Average long-term U.S. mortgage rates climb to 6.94 percent ASSOCIATED PRESS WASHINGTON — Average longterm U.S. mortgage rates inched up this week ahead of another expected rate increase by the Federal Reserve when it meets early next month. Mortgage buyer Freddie Mac reported Thursday that the average on the key 30-year rate ticked up this week to 6.94 percent from 6.92 percent last week. Last year at this time, the rate was 3.09 percent. The average rate on 15-year, fixed-rate mortgages, popular among those looking to refinance their homes, jumped to 6.23 percent from 6.09 percent last week. Last week it climbed over 6 percent for the first time since the housing market crash of 2008. One year ago, the 15-year rate was 2.33 percent. The Fed’s aggressive action has stalled a housing sector that, outside of the onset of the pandemic,has been hot for years. The National Association of Realtors said Thursday that sales of previously occupied U.S. homes fell in September for the eighth month in a row as house hunters faced sharply higher mortgage rates, bloated home prices and a tight supply of properties on the market. Sales fell 23.8 percent from September last year, and are now at the slowest annual pace since September 2012, excluding the steep slowdown in sales that occurred in May 2020 near the start of the pandemic.
the same monthly payment. “This is why the buyers have essentially been pushed out of the market,” said Lawrence Yun, NAR’s chief economist. Mortgage rates have risen sharply along with the 10year Treasury yield, which has been climbing amid expectations that the Federal Reserve will keep hiking interest rates in its bid to bring down inflation. The 10-year yield reached its
highest level since June 2008 this week. Because a lag of a month or two usually exists between a signed home purchase contract and a completed sale, the impact from the latest increase in mortgage rates won’t show up in sales for several weeks. That likely means further home sales declines ahead, Yun said. Surging home loan rates don’t just make homes less affordable, they also
discourage homeowners who locked in an ultra-low rate the last couple of years from buying a new home. That, in turn, can limit the number of homes that are available for sale. The inventory of homes on the market declined in September for the second month in a row. Some 1.25 million homes were on the market by the end of the month, down 2.3 percent from August and 0.8 percent versus September last year,
NAR said. “Homes are sitting on the market longer, just lingering on the market,” Yun said. “The buyers have disappeared.” On average, homes sold in just 19 days of hitting the market last month, up from 16 days in August. Before the pandemic, homes typically sold more than 30 days after being listed for sale. At the current sales pace, the level of for-sale properties amounts to a 3.2-month supply, Yun said. That’s unchanged from August. In a more balanced market between buyers and sellers there is a 5- to 6-month supply. While competition for homes has eased as mortgage rates have surged, it’s not unusual for sellers to receive multiple offers because there are so few properties on the market. That’s helping push home prices higher. Still, Yun expects home prices will decline in roughly half the country next year, with states where home values skyrocketed in recent years experiencing the biggest declines. That includes California, where prices could fall 10 percent next year, he said. “Higher mortgage rates always impact these expensive markets more heavily than other markets,” Yun said.