US Home Sales Fall to Lowest Level Since 2010

Home sales in the US are on a major decline. December marked the 11th straight monthly fall in sales of existing homes, the longest streak since 1999.

Driven by the US Federal Reserve’s fastest interest rate-hiking cycle since the 1980s, the US housing market has entered recessionary territory.

Sales dropped across the country, including the Northeast, South and Midwest. They were unchanged in the West. Although US existing home sales by number of units fell to a 12-year low in December, falling mortgage rates raised optimism that the under-pressure housing market could be turning a corner. Indeed, some analysts believe the worst of the housing market fallout has passed. The 30-year fixed mortgage rate retreated to an average 6.15% this week, the lowest level since mid-September.

The mortgage rate was down from 6.33% in the prior week and has declined from an average of 7.08% early in the fourth quarter, which was the highest since 2002. However, it remains well above the 3.56% average during the same period last year.

Homebuyers have been buffeted by the constant increases in interest rates in the past year, making finding an affordable home an increasingly difficult exercise. In December, the median existing house price ticked up by 2.3% from a year earlier. Despite the slightly higher asking prices, the pullback in mortgage rates has had the overall effect of improving affordability for prospective buyers.