Last month, existing home sales fell by more than 4% to 3.79 million. Compared to a year ago, that’s down almost 15%, according the National Association of Realtors.
Sales actually tumbled enough to hit their lowest level in 13 years, said Reuters. Back then – in August 2010 – sales were declining following the expiration of a government tax credit for homebuyers.
Going forward, Reuters said that home resales this year are on track for their worst performance since 1992.
“Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation,” National Association of Retailers Chief Economist Lawrence Yun said. “Multiple offers, however, are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market.”
First time homebuyers accounted for 28% of sales, up slightly from September but on par with last year. It was also close to the estimated annual rate of 32%.
Housing inventory has been declining since 2010, said a 2020 report from the NAR. From 2009 to 2019, inventories across the U.S. were down by nearly 50% with single family inventory down around 48.1% and condos down more than 57%.
This decrease has impacted home prices.
As of this October, the median existing-home price for all housing types was $391,800, an increase of 3.4% from October 2022 ($378,800). All four U.S. regions monitored by the NAR showed registered price increases for the month.
“While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October,” Yun noted. “In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years.”
Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Va., said that millions of homeowners who have locked in low mortgage rates are currently unwilling to move, according to Reuters. If they do sell and need to shop for a new home, they’ll be faced with high prices and high mortgage rates.
Citing Freddie Mac, the NAR said the 30-year fixed-rate mortgage averaged 7.44% as of November 16. While that rate is down from 7.50% the previous week, it’s up from 6.61% one year ago.
“Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest,” Yun said. “Though limited now, expect housing inventory to improve after this winter and heading into the spring. More inventory will result in more home sales.”