Home sales in the U.S., all-listed, fell more than 20% in September – the biggest drop since the start of the pandemic. But homes are still getting more expensive. This is the way
According to the latest data from real estate brokerage Redfin, the housing market continued its sharp downturn in September. Both home sales and listings fell for the month, signaling that buyers are buying. and sellers are carefully considering handing out.
The drop is the furthest on record – aside from the March 2020 drop.
The number of homes for sale was down 25% year-on-year and the number of new registrations was down 22%. The price is still high along with high interest rate is creating a toxic mixture of affordability – and worse still, uncertainty about what is to come.
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Everything is still expensive and getting more and more expensive
Medium Fixed mortgage rate for 30 years now almost at 7%, more than double from the beginning of the year and the highest in 20 years. Even so, the price hasn’t dropped much yet.
Nearly a quarter of homes for sale in September have dropped in price, but the average price is still 8% higher than in September 2021.
High interest rates and high prices mean both aspiring homeowners and those who already own hesitant to make a commitment.
You can see why buyers are left out: if you buy the average home now, your monthly mortgage payment will be 55% higher than if you bought it in early 2022, according to Zillow. .
That would cost the average household in the country 30 percent of their income just to pay the principal and interest on a home, according to Zillow, making them a “home burden.” And that 30% doesn’t include everything else that comes with home ownership: taxes, insurance, and maintenance.
High fees lead to lost transactions
About 60,000 transactions were made in September – that’s 17% of all homes that were contracted. Not only buyers withdraw but also sellers.
According to another Redfin report in September, 85% of homeowners have a locked-in mortgage rate much lower than the current rate and worry that if they sell, their next rate could be several times higher. percent score. That contributes to people staying in place, leading to fewer homes on the market, which then keeps prices high – almost like a housing standstill.
And it’s a problem that can continue in the long run as fewer and fewer new builds hit the market. According to the National Association of Home Builders (that is, excluding spring 2020), homebuilder confidence has hit a 10-year low. It fell eight points this month to 38.
And while some say the market become more balancedRobert Dietz, chief economist for the National Home Builders Association, doesn’t think so.
“The truth is that homeownership will decline in the coming quarters as higher interest rates and persistently high construction costs continue to depress a large number of potential buyers,” Dietz said in a statement. Press Release.
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