Home News US home sales, listings both plunged over 20% in September — the biggest drop since the start of the pandemic. But houses are still getting pricier. Here’s how

US home sales, listings both plunged over 20% in September — the biggest drop since the start of the pandemic. But houses are still getting pricier. Here’s how

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US home sales and listings both plummeted more than 20% in September. This is the biggest drop since the start of the pandemic.Method is as follows

The slowdown in the housing market continued sharply in September, according to the latest data from real estate broker Redfin. Both the number of home sales and listings fell in the month, suggesting that both buyers and sellers are thinking twice about making a move.

It was the biggest drop in history outside of March 2020.

The number of homes sold was down 25% year-on-year, and new listings were down 22%.Combined still high price high interest rate It creates a toxic combination that is out of control. Worse, there is also the uncertainty about what will happen.

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Things are still expensive and getting more expensive

average 30 year fixed mortgage rate It’s now nearly 7%, more than double what it was at the beginning of the year, and the highest in 20 years. Despite this, prices have not come down much.

Nearly a quarter of homes listed for sale in September saw their prices fall, but the median price was 8% higher than in September 2021.

These high interest rates and skyrocketing prices are making it difficult for both aspiring homeowners and those who already own a home. hesitant to make a promise.

According to Zillow, buying the average home now will pay a 55% higher monthly mortgage payment than if you bought it in early 2022.

read more: ‘Numbers just don’t cut it’: Rising mortgage rates have forced some to give up on buying a home, while others think they’ve found a workaround

According to Zillow, that means the country’s median household will spend 30% of its income on principal and interest payments when buying a home, “putting a strain on the home.” And that 30% doesn’t include all the taxes, insurance, maintenance, etc. that come with owning a home.

High costs lead to lost trades

About 60,000 transactions were canceled in September. This represents his 17% of all contracted housing. Not only buyers but also sellers withdraw.

Another report released by Redfin in September found that 85% of homeowners had set their fixed mortgage rates significantly lower than their current rates, and that if they sold their mortgages, their next interest rate would increase. I am concerned that it could be a few percentage points higher. It keeps people in place and helps reduce the number of homes on the market.

And with fewer new builds likely to hit the market, this is a problem that could persist for the long term. has reached its lowest level (that is, excluding Spring 2020). This month it’s down 8 points to 38.

and the market is become more balancedRobert Dietz, chief economist for the National Homebuilders Association, doesn’t think so.

“Homeownership rates will continue to decline in the coming quarters as rising interest rates and ongoing construction cost hikes continue to drive down prices for many potential buyers,” Dietz said in a press release. rice field.

what to read next

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This article is for information only and should not be construed as advice. It is provided without warranty of any kind.

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