Notice in the past few years, as mortgage rates went through the roof (blue line) existing home sales nosedived. New home sales haven't tanked as badly, largely because developers are buying down mortgage rates and offering attractive financing.
By Chart R
Oct 23. 2024
The “freeze” in the housing market is showing few signs of thawing out. In September, previously owned American home sales slowed to a seasonally-adjusted annual rate of just 3.84 million, some way below analysts’ estimates and the lowest reading in 14 years.
Indeed, when it comes to buying a home, Americans are increasingly only interested if the mortar’s barely dry. While existing house sales still far outweigh the amount of deals being done on new homes in the US, when you compare the current housing market to how it sat 10 years ago, a clear trend has emerged: sales of new homes have picked up, while sales of older housing stock have fallen.
The rate of new home sales in August (relative to the start of 2014) was up more than 65%, while existing home sales are down 21% over the same time frame, dropping from a rate of 4.9 million a decade ago.
There are, of course, a multitude of factors at play influencing this latest trend, from current home owners refusing to budge thanks to low mortgage rates effectively locking them in, to new-build constructors dangling some pretty appealing discounts and deals for buyers as a way to shift inventory stockpiles.
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