A ‘for sale’ sign hangs in front of a home in Miami, Fla., on June 21, 2022. (Joe Raedle/Getty Images)
By Jack Phillips. Media: The Epoch Times.
The United States saw a record drop in home sales in September 2022 amid surging interest and mortgage rates, according to a report from real estate firm Redfin.
The number of homes sold that month dropped by 25 percent and new listings dropped by 22 percent, according to the report. Thatās the largest decline in records in both categories other than in 2020 during the height of the COVID-19 pandemic, the report noted.
āThe U.S. housing market is at another standstill, but the driving forces are completely different from those that triggered the standstill at the start of the pandemic,ā Redfin economics research lead Chen Zhao said in a statement.
āThis time, demand is slumping due to surging mortgage rates, but prices are being propped up by inflation and a drop in the number of people putting their homes up for sale,ā Zhao added. āMany Americans are staying put because they already relocated and scored a rock-bottom mortgage rate during the pandemic, so they have little incentive to move today.ā
The firm noted that while prices have dropped significantly, mortgage rates have pushed monthly payments up more than 50 percent year-over-year.
āThe housing market is going to get worse before it gets better,ā Zhao said. āWith inflation still rampant, the Federal Reserve will likely continue hiking interest rates. That means we may not see high mortgage ratesāthe primary killer of housing demandādecline until early to mid-2023.ā
Chicago, which has seen significantly high murders in recent years, and nearby Lake County, Illinois, were deemed the No. 1 and No. 2 respective slowest housing markets in the United States. Next were Charleston, South Carolina; Honolulu, Hawaii; and Pittsburgh, Pennsylvania.
About 60,000 home-purchase agreements were scrapped in September, the firm said, adding thatās equal to about 17 percent of homes that went under contract.
āThatās the highest percentage on record with the exception of March 2020āthe month the World Health Organization declared the coronavirus a pandemic. Fewer than half (46 percent) of offers written by Redfin agents faced competition in September, the lowest share since the start of the pandemic,ā the report said.
Redfinās report comes as Freddie Mac found that mortgage rates hit their highest levels in 20 years last week with the 30-year fixed-rate mortgage averaging near 6.92 percent, or up from 6.66 percent a week before that.
āWe continue to see a tale of two economies in the data,ā Sam Khater, Freddie Macās chief economist, said in its report. āStrong job and wage growth are keeping consumersā balance sheets positive, while lingering inflation, recession fears, and housing affordability are driving housing demand down precipitously.ā