Home sales fell 2 percent between August and September and retreated 15.4 percent from a year ago as prices and interest rates climbed.
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Sales of existing homes dropped in September as mortgage rates continued their climb to 20-year highs.
Home sales fell 2 percent between August and September and retreated 15.4 percent from a year ago, according to data released Thursday by the National Association of Realtors. Sales landed at a seasonally adjusted annual rate of 3.96 million.
“As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” NAR Chief Economist Lawrence Yun said in a statement. “The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains.”
The 30-year fixed mortgage rate averaged 7.57 percent as of Oct. 12, according to Freddie Mac, up from 7.49 percent the previous week and 6.92 percent one year ago.
Total housing inventory registered at the end of September was 1.13 million, up from 2.7 percent in August but down 8.1 percent from a year ago, according to NAR. The steep rise in mortgage rates has created a “lock in” effect wherein would-be homesellers are reluctant to list their homes and lose their lower mortgage rates, resulting in a dire shortage of homes for sale.
“Home sales have slowed to their slowest pace in more than a decade, yet existing home prices in September were still almost 3 percent higher than a year before. You don’t normally see prices rise at the same time that sales fall,” said Holden Lewis, a home and mortgage expert at NerdWallet….