Housing Crisis – U.S. Home Sales Fall Again
On the economic front, the biggest piece of American news to release this week was the listing on existing home sales, a significant metric that measures the sales and prices of existing single-family homes in the United States. For the month of September, existing home sales fell for the 8th consecutive year, down 1.5% to an adjusted annual rate of 4.71 million. On a further frightening note, a declining streak of eight consecutive months hasn’t been seen in 15 years ever since the housing crisis that concluded with the Great Recession of 2008. For the month of September alone, a home sales rate of 4.7 million hasn’t been seen since the housing market first started to recover in 2012.
The reason for such a low existing home sales turnout is due to high mortgage rates, which seem on track to break 7% after being around 3% just a year earlier. The current 30-year fixed mortgage rate, however, has broken this mark at around 7.2%, the highest it has been in over 20 years. To translate this to existing home sales, these record-high mortgage rates create pressure and uncertainty on U.S. homeowners. Those who do not need to immediately move, they would much rather prefer to stay put in their current homes rather than sell their homes just to get stuck with high borrowing costs when purchasing a new house. These unfortunate trends do not go unnoticed, as in response, investors kept the stock market negative even after several positive earnings reports have released for the third quarter.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
