Recently released data gathered from the National Association of Realtors shows that high mortgage rates have continued to hurt the housing market. As a result, the number of new homes sold has dropped to its lowest level in 13 years.
In the years after the housing bust, a lot of people locked in low-interest rates. People who owned homes locked in low rates when the Federal Reserve lowered interest rates again during the pandemic. Since mortgage rates are already approaching eight percent, over sixty percent of homeowners are unwilling to sell their properties and purchase new ones because their current mortgage rates are less than six percent.
After taking into account the changing of the seasons, sales of existing homes fell 2% in September compared to the previous month. Sales are 15.4% less than they were a year ago.
Even though interest rates are going up, home prices have been going up because there aren’t many homes for sale. In September, the typical price of an existing home sold was $394,300, which was 2.8% more than the same month last year. This was the third month in a row that prices went up from the previous year.
Inflation hit its worst level in forty years in the spring of 2022, when the Federal Reserve started raising interest rates. This was because of the Biden administration’s wasteful spending plans and too-loose monetary policy.
Lawrence Yun, chief economist for the National Association of Realtors (NAR), said, “Lack of inventory and high prices continue to hurt home sales, as they have all year. The Federal Reserve can’t keep raising interest rates when inflation is going down and job growth is slowing down.”
Since its peak last year, inflation has gone down. But it has been stable for a while now, and it even went up in September, which made people worry that inflation might last longer than they thought. According to past measures, the unemployment rate in September was 3.8%, which is very low. At the same time, 336,000 new jobs were created.
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