10 months in a row? Eckkkkkk!
A lack of new construction means while sales are dropping quickly, short supply has kept home prices high. Ergo, if your young and want to buy a home? Go f-ck yourself!
U.S. Home Sales Post Record 10th Straight Month of Declines
November existing-home sales fell 7.7% as Fed keeps raising interest rates
Existing-home sales have dropped about 37% from their recent peak in January.
By Nicole Friedman, WSJ
Updated Dec. 21, 2022 5:17 pm ET
U.S. existing-home sales slid in November for a 10th straight month, extending a record streak of declines as high mortgage rates and home prices pushed many buyers out of the market.
Sales of previously owned homes declined 7.7% in November from the prior month to a seasonally adjusted annual rate of 4.09 million, the weakest rate since May 2020, the National Association of Realtors said Wednesday. November sales fell 35.4% from a year earlier. The streak of declines is the longest on record in data going back to 1999, NAR said.
Existing-home sales have dropped about 37% from their recent peak in January. Mortgage rates surged to above 7% in early November from 3.1% at the end of 2021. That boosted expected mortgage payments for many buyers by hundreds of dollars a month, driving many shoppers out of the market.
This year’s sharp housing-market slowdown marks a major way the Federal Reserve’s aggressive interest-rate increases are rippling through the economy. The central bank raised rates seven times this year, including in November and last week, in an effort to combat high inflation by slowing spending, hiring and investment.
U.S. consumer confidence rose sharply this month, to its highest reading since April, due to easing inflation pressures and a resilient labor market, the Conference Board, a private research group, said in a separate report Wednesday. Its consumer-confidence index jumped to 108.3 in December from a revised 101.4 in November.
Early stock gains accelerated Wednesday after the reports were released. The Dow Jones Industrial Average gained 1.6%, while the S&P 500 and the Nasdaq Composite both rose 1.5%. The 10-year Treasury yield inched higher, while the two-year yield fell.
Home prices have declined from their springtime peaks around the U.S., and prices in some markets have slipped below year-ago levels. But on a national basis, prices are still up from last year, largely because the supply of homes for sale remains lower than normal.
The median existing-home price rose 3.5% in November from a year earlier to $370,700, NAR said. Prices fell month-over-month for the fifth straight month after reaching a record $413,800 in June.
“Today’s sales activity in November is essentially almost the same as that lockdown period back in May 2020,” said Lawrence Yun, NAR’s chief economist. “Today’s November sales figures are clearly reflecting this rapid rise in mortgage rates.”
Excluding the early months of the Covid-19 pandemic, November’s existing-home sales rate was the lowest since November 2010, Mr. Yun said.
Anna and Gabriel Martinez, who live in an apartment in San Antonio, have been looking to buy a house in the surrounding area. They think houses there are overpriced, and they are worried about their job security if the economy enters a recession next year. They recently decided to stay in their apartment another year.
“Even with our income and our down payment, it’s just not safe for us right now, or at least that’s the sentiment,” said Mr. Martinez, who works as a risk analyst for a tech company. “Maybe this time next year, we’ll get a better view of where the market’s at [and] if it’s OK to pull the trigger.”
Fed officials last week signaled plans to keep raising interest rates next year to reduce high inflation by slowing economic growth. Cooling off the housing market is a key part of that process because weaker home sales damp related spending such as on renovations, furnishings and landscaping. U.S. retail sales fell in November at stores selling furniture, home furnishings, electronics and appliances, building materials and garden equipment and supplies, the Commerce Department reported last week.
Homes typically go under contract a month or two before the contract closes, so the November sales data largely reflect purchase decisions made in October and September.
There are early indications that demand has ticked up slightly in recent weeks, as mortgage rates have slid from their recent highs. The average rate on a 30-year fixed-rate mortgage fell to 6.31% last week from more than 7% in early November, housing-finance agency Freddie Mac said Thursday.
Mortgage applications for home purchases rose 4% on a seasonally adjusted basis in the week ended Dec. 9 from the prior week, according to the Mortgage Bankers Association. Real-estate brokerage Redfin Corp.’s seasonally adjusted measure of home-buying demand, which tracks buyer inquiries, rose 5% in the four weeks ended Dec. 11 compared with a month earlier.
But many buyers are waiting until the spring to see if the inventory of homes for sale increases and if prices drop further, real-estate agents say.
Prices are already declining year-over-year in some markets. The median sales price in Idaho’s Ada County, which includes Boise, fell 2.5% in November from a year earlier, according to Boise Regional Realtors. The median sales price fell 0.9% in the Phoenix metro area in November and held flat in the Austin, Texas, metro area, according to local real-estate groups.
The number of homes for sale has risen from a year ago because homes are sitting on the market longer, but prospective sellers are reluctant to list their homes. Many homeowners have rates on their mortgages below 4% and are unwilling to give up their current rate for a higher one on a new home.
The typical home sold in November was on the market for 24 days, up from 21 days from the prior month, NAR said.
Nationally, there were 1.14 million homes for sale or under contract at the end of November, down 6.6% from October and up 2.7% from November 2021, NAR said. At the current sales pace, there was a 3.3-month supply of homes on the market at the end of November.
The higher interest rates didn’t deter Ilana Ben-Ezra and Mendel Zecher, who went under contract to buy their first home in Boca Raton, Fla., last month. They agreed to pay $592,500 for a three-bedroom house with an office, about 9% below the list price.
“It balances out—rates going up and prices going down,” Mr. Zecher said. “I think that allowed us to find a decent deal.”
The share of first-time buyers in the market was 28% in November, up from 26% a year earlier. About 26% of November existing-home sales were purchased in cash, up from 24% in the same month a year ago, NAR said.
Existing-home sales fell the most month-over-month in the West, down 12.5%, and in the South, down 7.1%.
Home builders are offering incentives to buyers and cutting prices in some markets in response to lower demand.
A measure of U.S. home-builder confidence fell for the 12th straight month in December to the lowest level since April 2020, the National Association of Home Builders said this week.
Housing starts, a measure of U.S. home-building, fell 0.5% in November from October, the Commerce Department said this week. Residential permits, which can be a bellwether for future home construction, fell 11.2%.
News Corp, owner of the Journal, also operates Realtor.com under license from NAR.