U.S. Home Sales Fell for Ninth Straight Month in October
November 21, 2022
Sales of existing homes in the U.S. fell for a ninth consecutive month in October, the longest streak of declines on record, as surging mortgage rates and higher prices weigh on potential buyers.
Sales of previously owned homes fell 5.9% in October from the month prior, bringing the month’s sales to a seasonally adjusted rate of 4.43 million, according to the National Association of Realtors. That is the lowest since May 2020, when the housing market was still at a virtual standstill because of the pandemic.
Existing-home sales have declined each month since February, the longest stretch of monthly declines since the National Association of Realtors began tracking this data in 1999. Since their recent peak in January, existing-home sales have dropped nearly 32%. October’s sales were down 28.4% from a year earlier. That is the biggest year-over-year decline since February 2008, when the subprime mortgage crisis caused the housing market to crash.
The slowdown is largely due to rapidly rising interest rates, which have more than doubled over the past year, reaching higher than 7% in recent weeks. This means higher borrowing costs, which have driven protective buyers from the market and incentivized potential sellers to keep their homes off the market, keeping inventory tight.
The housing market is expected to continue slowing in 2023 because affordability is at the lowest level in decades. The low supply of homes on the market means that prices have continued to climb, but the pace of price increases has slowed dramatically. Median home prices were up 6.6% in October from a year earlier. That is the slowest since June 2020 and a marked slowdown from the double-digit price growth seen in recent years.