USA: the number of homes sold collapses. We are at a 13 year low
Interest rates are having their effect felt on the American real estate market, as well as on the securities market.
Sales of previously owned homes in the United States fell 2% from the previous month to a seasonally adjusted annualized rate of 3.96 million units in September 2023, the lowest since October 2010.
However, the result was slightly higher than market expectations of 3.89 million units. The decline was consistent with other releases during the period, as soaring mortgage rates not only continue to discourage first home buyers, but also prevent homeowners from selling properties tied to lower mortgage rates.
Single-family home sales fell 1.9% to 3.53 million, while co-op sales fell 2.3% to 430,000 units.
Meanwhile, average sales prices for existing homes increased 2.8% year-over-year to $394,300, but less than the devaluation, so real values fell. Despite the price surge, total home inventory at the end of the month rose 2.7% to 1.13 million, equivalent to a 3.4 month supply at the current pace of sales.
Here is the relevant graph
As has never been seen in the last 10 years, not even during the darkest periods of Covid-19, the number of non-new homes sold has been so low. The inverse relationship with mortgage interest rates is evident
High interest rates are making themselves felt on transactions and property prices, which are unable to follow inflation and therefore show a decline in their real value.
On the one hand, therefore, houses become more affordable, but on the other hand, those who have a current mortgage risk finding themselves in great difficulty, both due to the interest and the drop in the real property value.
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The article USA: the number of homes sold collapses. We are at a 13-year low comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/usa-crolla-il-numero-di-case-vendute-siamo-ai-minimi-da-13-anni/ on Thu, 19 Oct 2023 16:22:36 +0000.