Existing Home Sales Drop to Lowest Level Since 2010
Sales of existing homes dipped 4.1% further to a pace of 3.79 million in October, making it the lowest monthly pace since August 2010. On a yearly basis, home sales were down 14.6%, the smallest drop in 16 months. After surpassing the 7% threshold in August, mortgage rates were roughly steady in the low 7s until the last week of September. Despite the rise in pending home sales in September, the late month surge in mortgage rates, following the Fed’s September projections, may have disrupted the process for some potential buyers. Housing affordability continues to be a major headwind, and many potential buyers are likely caught in the tug of war between holding out and waiting for better pricing and mortgage rate conditions or rushing to beat potentially worse conditions.
What This Data Means for Consumers
The U.S. median existing home sales price continued to grow, gaining 3.4% to $391,800 in October. Following the unseasonal influx of newly listed homes in August, according to Realtor.com, September data showed a give-back, but October saw new listing declines shrink further, evidence that sellers are growing more accustomed to the high-rate environment. The number of new for-sale options that buyers have to consider could be poised to increase in the months ahead, which are typically slower months for housing activity. Furthermore, although they are less common than one year ago, price reductions rose unseasonably in October, which could portend some weakening in home price gains in the months ahead. As down payments hit a new high in the third quarter, the stakes for today’s home shoppers are high.
Market Trends and What Lies Ahead
Recent survey data from October show that three times as many consumers expected mortgage rates to rise in the next 12 months as expected them to fall. It seems that holding out was the decision for more potential buyers in recent months. However, this could change as sellers adjust to the high-rate environment and new for-sale options become available. With the market experiencing unseasonal price reductions, homebuyers may find more favorable conditions in the coming months, making it a crucial time to keep an eye on the market and be prepared to act when the right opportunity arises.
For more information on existing home sales and how to navigate the current market, visit Jessica Fulk Real Estate.
Orginal article: Link To Article – provided by Kansas City Realtors
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