AP

US home sales fell in October for ninth straight month

Nov 17, 2022, 5:00 PM | Updated: Nov 18, 2022, 9:50 am

FILE - This is a home in Mount Lebanon, Pa., under contract, Oct. 17, 2022. Sales of previously occ...

FILE - This is a home in Mount Lebanon, Pa., under contract, Oct. 17, 2022. Sales of previously occupied U.S. homes fell in September for the eighth month in a row, though the decline was the most modest yet since the housing market began to cool amid sharply higher mortgage rates. The National Association of Realtors said Thursday, Oct. 20, 2022 that existing home sales fell 1.5% last month from August to a seasonally adjusted annual rate of 4.71 million. (AP Photo/Gene J. Puskar, file)

(AP Photo/Gene J. Puskar, file)

Sales of previously occupied U.S. homes fell in October for the ninth consecutive month to the slowest pre-pandemic sales pace in more than 10 years as homebuyers grappled with sharply higher mortgage rates, rising home prices and fewer properties on the market.

Existing home sales fell 5.9% last month from September to a seasonally adjusted annual rate of 4.43 million, the National Association of Realtors said Friday. The string of monthly sales declines this year is the longest on record going back to 1999, the NAR said.

Sales cratered 28.4% from October last year. Excluding the steep slowdown in sales that occurred in May 2020 near the start of the pandemic, sales are now at the slowest annual pace since December 2011, when the housing market was still mired in a deep slump following the foreclosure crisis of the late 2000s.

Despite the slowdown, home prices continued to climb last month, albeit at a slower pace than earlier this year. The national median home price rose 6.6% in October from a year earlier, to $379,100.

The median home price is down about 8% from its June peak, but remains 40% above October 2019, before the pandemic, said Lawrence Yun, the NAR’s chief economist.

“That’s really hurting affordability,” he said. “Most household incomes have not risen by 40%.”

The inventory of homes on the market declined for the third month in a row. Some 1.22 million homes were for sale by the end of October, down 0.8% from September, the NAR said.

That amounts to 3.3 months’ supply at the current pace. In a more balanced market between buyers and sellers, there is a 5- to 6-month supply.

The housing market has slowed as U.S. mortgage rates have more than doubled from a year ago, shrinking the buying power of Americans.

The average rate on a 30-year home loan was 6.61% this week, according to mortgage buyer Freddie Mac. A year ago, the average rate was 3.1%. Late last month, the average rate topped 7% for the first time since 2002.

That can add hundreds of dollars to monthly mortgage payments, and also discourage homeowners who locked in an ultra-low rate the last couple of years from buying a new home. It’s part of the reason that there are fewer homes on the market.

Mortgage rates are likely to remain a significant hurdle for some time as the Federal Reserve has consistently signaled its intent to keep raising its short-term interest rate in its bid to squash the hottest inflation in decades.

Two weeks ago, the Fed raised its short-term lending rate by another 0.75 percentage points, three times its usual margin, for a fourth time this year. Its key rate now stands in a range of 3.75% to 4%.

While mortgage rates don’t necessarily mirror the Fed’s rate increases, they tend to track the yield on the 10-year Treasury note. The yield is influenced by a variety of factors, including expectations for future inflation and global demand for U.S. Treasurys.

With the number of properties on the market scarce, sellers typically receive multiple offers, especially for the most affordable homes.

On average, homes sold in just 21 days of hitting the market last month, up from 19 days in September, the NAR said. Before the pandemic, homes typically sold more than 30 days after being listed for sale.

The combination of higher mortgage rates and rising prices are keeping many first-time buyers on the sidelines. They represented 28% of sales last month, down from 29% in September, the NAR said. By historical standards, first-time buyers typically made up as much as 40% or more of transactions.

“First-time buyers are really struggling in today’s market,” Yun said.

Yun expects home prices will decline about 5% in roughly half the country next year, with metropolitan areas where home values skyrocketed in recent years experiencing the biggest declines. That includes San Francisco, where prices could fall 15% next year, he said. That said, Yun also forecasts home prices will climb about 5% in Indianapolis and other markets where job growth remains strong and real estate values have risen more modestly.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Photo: Homeland Security Secretary Alejandro Mayorkas is sworn-in before the House Committee on Hom...

the MyNorthwest Staff with wire reports

Senate dismisses two articles of impeachment against Homeland Security secretary, ends trial

The Senate dismissed impeachment charges against Homeland Security Secretary Alejandro Mayorkas, as Republicans pushed to remove him.

14 hours ago

idaho gender-affirming care...

Associated Press

Supreme Court allows Idaho to enforce its ban on gender-affirming care for transgender youth

The Supreme Court is allowing Idaho to enforce its ban on gender-affirming care for transgender youth while lawsuits over the law proceed.

2 days ago

Image: Former President Donald Trump speaks to the press in Manhattan state court in New York City ...

Associated Press

Trump’s hush money trial gets underway; 1st day ends without any jurors selected

The historic hush money trial of Donald Trump got underway Monday with the arduous process of selecting a jury to hear the case.

2 days ago

Photo: Israeli Iron Dome air defense system launches to intercept missiles fired from Iran, in cent...

Tia Goldenberg and Josef Federman, The Associated Press

Israel is quiet on next steps against Iran — and on which partners helped shoot down missiles

On Sunday, Israel's leaders credited an international military coalition with helping thwart a direct attack from Iran.

3 days ago

Early phases of Iran's drone attack against Israel. (Photo: Getty Images)...

Associated Press

The Latest | Iran launches its first direct military attack against Israel

Iran launched its first full-scale military attack against Israel on Saturday, sending drones toward Israel.

5 days ago

Early phases of Iran's drone attack against Israel. (Photo: Getty Images)...

Associated Press

BREAKING: White House confirms Iran drone attacks towards Israel

JERUSALEM (AP) — The White House says it will provide unspecified support for Israel’s defense against an ongoing airborne attack from Iran. National Security Council spokesperson Adrienne Watson said in a Saturday statement that “Iran has begun an airborne attack against Israel.” She added: “The United States will stand with the people of Israel and […]

5 days ago

US home sales fell in October for ninth straight month