Published by Breitbart News | January 20, 2023
The housing market has been weird for almost a year and now it appears to be on the verge of flipping that weirdness upside down.
Sales of existing homes, the largest part of the market, have been declining for eleven months, largely as a result of the Federal Reserve’s tighter monetary policy pushing up mortgage rates. At the same time, however, home prices have continued to climb.
The result of higher mortgage rates and higher prices has pummeled home affordability, which has pushed sales even lower. Many homeowners who might be tempted to sell are holding back because they would face a much higher rate on the mortgage of their next home. Some might face a higher monthly mortgage bill even on a substantially less expensive house simply because the interest cost has gone up so much.
Data from the National Association of Realtors released Friday show that we may be near the tipping point where this reverses. Sales are likely to start to climb and prices fall.
Compared with one year ago, December sales were down 34 percent, data from the National Association of Realtors showed Friday. It was the slowest year in nearly decade for home sales. Compared with a month earlier, sales were down 1.5 percent. Both were smaller than expected and indicate a slowdown in the pace of decline. The month-to-month decline annualized to a rate of 15.6 percent, half of the December-to-December decline. Full-year sales were down 17.8 percent compared with the prior year.
The inventory of houses for sale at the end of December was 970,000 units, which was down 13.4 percent from November. Compared with December of last year, however, inventory is up 10.2 percent. So, some of the tightness in inventory levels has eased over the past 12 months.