Published by FOX Business | October 19, 2023
Economists project 2023 will mark the slowest home sales year since the housing bubble burst in 2008.
Redfin estimated there will only be roughly 4.1 million sales of existing homes across the nation by year’s end due to persistently high mortgage rates — now hovering at 7.63% — and low inventory scaring buyers away.
Just last month, sales retreated 15.4% from the previous year, according to data from the National Association of Realtors. Sales receded in all regions except for the Northeast in September, the data showed.
With rates sitting at their highest levels in over two decades, a growing number of buyers are sitting on the sidelines and questioning whether 2023 is the right time to move.
Data released Wednesday by the Mortgage Bankers Association showed mortgage applications dropped to the lowest level since 1995.
“Mortgage rates are staying high longer than anticipated, keeping away everyone except those who need to move and pushing our sales projection for the year down to a 15-year low,” said Chen Zhao, Redfin’s economic research lead.
The last time sales were this low was during the Great Recession, when the tough economic conditions and slow demand drove home prices down as much as 30% year over year in some parts of the country, according to Zhao.
In 2008, the housing market crashed due to a combination of the subprime mortgage crisis, high levels of debt and a lack of financial regulation, according to Norada Real Estate Investments. It led to a severe economic recession that impacted millions of Americans, many of whom found themselves in homes worth less than their mortgages.
