Home sales fell for the ninth straight month in October, as higher mortgage rates scared off potential buyers

by | Nov 18, 2022 | Business

Home sales declined for the ninth straight month in October, as higher interest rates and surging inflation kept buyers on the sidelines.Sales of previously owned homes dropped 5.9% from September to October, according to the National Association of Realtors. That is the slowest pace since December 2011, with the exception of a very brief drop at the beginning of the Covid-19 pandemic.The October reading put sales at a seasonally adjusted, annualized pace of 4.43 million units. Sales were 28.4% lower year over year.Even as sales slow, supply is still stubbornly low. There were 1.22 million homes for sale at the end of October, an decrease of just under 1% both month to month and year over year. That’s a 3.3-month supply at the current sales pace. Historically, a balanced market is considered to be a six-month supply.Read more real estate coverageThe median price of an existing home sold in October was $379,100, an increase of 6.6% from the year before. The price gains, however, are shrinking, as the seasonal drop in home prices this time of year appears to be much deeper than usual.”Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers,” said Lawrence Yun, chief economist for the NAR. “In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%.”A “For Sale” sign outside a house in Albany, California, on Tuesday, May 31, 2022.David Paul Morris | Bloomberg | Getty ImagesOverall, homes went under contract in 21 days in October, up from 19 days in September and 18 days in October 2021. More than half, 64%, of homes sold in October 2022 were on the market for less than a month, suggesting that there is still strong demand if the home is priced right.While sales are dropping now across all price points, they are weakening most in the $100,000 to $250,000 range and in the $1 million plus range. On the lower end, that is likely due to the severe shortage of available homes in that price range. Big losses in the stock market, as well as inflation and global economic uncertainty, may be weighing on high-end buyers. …

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