America’s Housing Sales Hit 13-Year Low

U.S. home sales dropped in September to the lowest level since the foreclosure crisis as surging interest rates and climbing home prices made buying a home more challenging.

Historically low inventory of homes for sale continued to push prices up and rates that crossed over 7% in August have pulled sales down to their lowest level in 13 years.

The median price for existing homes was up 2.8% from a year ago and marked the third consecutive month of year-over-year price increases, setting a record high price for homes in September. 

Low inventory and high prices contributed to hamper home sales. Some analysts contend that the Federal Reserve cannot keep raising interest rates in light ofsoftening inflation and weakening job gains.

With the Fed indicating its benchmark rate will stay “higher for longer,” and mortgage rates staying higher as well, analysts expect more monthly drops in home sales through the rest of the year.

Homeowners are staying in place and pushing inventory to historically low levels of about half of what was typical before the pandemic.

As the high cost to buy a home remains a barrier for many people, analysts are wondering if this a temporary situation or, perhaps, a new era for homeownership.

Not only are high costs excluding people from the opportunity to build equity and wealth through homeownership, the composition of who remains in the market is changing, with just 27% of those buying homes were first time buyers, down from a historically typical share in the high 30% to low 40% range.