Americans real estate is stuck in a serious rut.
The US housing market has never moved so little, according to a new report from the National Association of Realtors.
This October, the pending home sales rate dropped 1.5% from September — the lowest number ever recorded for the metric since the trade group began tracking it in 2001.
The report also noted an 8.5% year-over-year decline in transactions across all four US regions.
The finding — which is extreme, if not surprising to those following the nation’s housing crisis — is widely attributed to low supply and languishing high mortgage rates aimed to combat inflation.
“During October, mortgage rates were at their highest, and contract signings for existing homes were at their lowest in more than 20 years,” said Lawrence Yun, NAR chief economist. “Recent weeks’ successive declines in mortgage rates will help qualify more home buyers, but limited housing inventory is significantly preventing housing demand from fully being satisfied. Multiple offers, of course, yield only one winner, with the rest left to continue their search.”
While rates are already dropping, the inventory issue has shown no sign of improving in the near future.
Markets that do have higher inventory, though, are significantly benefitting from it.
“Home sales are rising in places where more inventory is available,” Yun added. “Sales for properties priced above $750,000 were higher than a year ago, because there is more inventory at this price point than what we saw last October.”
Newly built home sales are also up year-over-year, by 4.5%.
Overall, the situation serves to emphasize that “It is vital that we continue to focus on boosting housing supply by all means in all corners of the country over the coming months,” said Yun.
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