Source: Reuters —
WASHINGTON, Nov 18 (Reuters) – U.S. existing home sales tumbled for a record ninth straight month in October as the 30-year fixed mortgage rate hit a 20-year high and prices remained elevated, pushing homeownership out of the reach of many Americans.
Despite the broad decline in sales reported by the National Association of Realtors on Friday, housing supply remained tight, with considerably fewer homes coming on the market than in the prior year. The housing market has been the sector hardest hit by aggressive Federal Reserve interest rate hikes that are aimed at quelling high inflation by dampening demand in the economy.
“The combination of rising house prices and mortgage rates have sent housing affordability plummeting,” said Daniel Vielhaber, an economist at Nationwide in Columbus, Ohio. “The decline in affordability is by design to some extent. The Fed’s goal of slowing economic demand by raising interest rates starts with home sales.”
Existing home sales dropped 5.9% to a seasonally adjusted annual rate of 4.43 million units last month. Outside the plunge during the initial phase of the COVID-19 pandemic in the spring of 2020, this was the lowest level since December 2011.
Economists polled by Reuters had forecast home sales would tumble to a rate of 4.38 million units.
House resales, which account for a big chunk of U.S. home sales, slumped 28.4% on a year-on-year basis in October. That was the largest drop since February 2008.
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