The resale housing market faced another setback in September, with data released by the National Association of Realtors (NAR) revealing a 2% drop in sales of previously owned homes from August. The seasonally adjusted annual rate stood at 3.96 million, marking a sharp 15.4% decline from the previous year. NAR projections anticipate a 20% decrease in sales for the entire year.
High mortgage rates emerged as a significant factor impacting both supply and demand within the housing market. These rates have dampened buyer interest and discouraged current homeowners from listing their properties. This situation is poised to worsen if rates continue to climb. Jiayi Xu, an economist at Realtor.com, warned ahead of the report, stating, “This ongoing trend poses difficulties for prospective first-time home buyers in their quest to find a suitable home.”
As mortgage rates hover near 20-year highs and show potential for further increases, housing affordability has become an increasingly pressing concern for households. This trend is particularly challenging for first-time homebuyers, who are typically more sensitive to price and interest rates. In September, they comprised only 27% of sales, matching the lowest percentage recorded in 2022.
A significant impediment is the strikingly low number of homes available for sale. Presently, the market hosts a mere 1.13 million units, marking an 8.1% decrease from last year and marking the lowest figure for this month since 1999. Despite declining sales and inventory, prices continue to rise due to the persistent scarcity of available homes. The median existing home price in September reached $394,300, reflecting a 2.8% increase from the previous year.
Across the United States, median prices surged in all regions. The Northeast reported a notable 5.2% year-over-year increase, reaching $439,900. Meanwhile, prices in the Midwest rose by 4.7% to $293,300, the South saw a 3.1% increase to $360,500, and the West experienced a 1.8% rise to $606,100. NAR’s chief economist, Lawrence Yun, emphasized the urgency for more housing supply, stating, “For the third straight month, home prices are up from a year ago, confirming the pressing need for more housing supply.”
In essence, the prevailing conditions within the resale housing market underscore the pressing need for comprehensive reforms and strategic interventions to ensure a more accessible and equitable real estate landscape for all stakeholders involved. In light of rising prices, elevated mortgage rates, and scarce inventory, the feasibility of home ownership is increasingly challenging. Given these substantial obstacles, it’s evident why both buyers and sellers in 2023 are grappling to find success in this demanding market.
Source: Yahoo Finance
