US sees RECORD drop in house sales as purchases plummet 23% amid skyrocketing mortgage rates

Home sales in September fell to their all-time low, new data shows as mortgage rates hit their 20-year high and inflation bites into existing savings.

New data from redfinwho boasts of running the country’s number one real estate brokerage site, published Wednesday, saw the magnitude of the slowdown — which had been widely predicted.

Home sales in September fell 22.8 percent year-on-year, with 499,941 deals closed compared to 647,413 in September last year.

The national average interest rate for a 30-year fixed rate was 6.1 percent — up from 2.9 percent this time last year — and has only risen since.

Redfin announced on Wednesday that September home sales were all-time low

Mortgage rates have more than doubled since last year, reaching a 20-year high last week, according to data released Wednesday by the Mortgage Bankers Association.

The 30-year fixed rate rose to 6.94 percent in the second week of October, from 6.81 percent a week earlier.

Redfin also reported that sellers were rethinking amid the market’s seize up: New listings fell 22 percent last month, marking another grim record for the biggest drop in history, excluding the pandemic months of April and May 2020 .

“The US housing market has stalled again, but the driving forces are completely different from those that led to the stalling at the start of the pandemic,” said Chen Zhao, Redfin’s head of economics research.

“This time, demand is falling due to rising mortgage rates, but prices are being pushed up by inflation and a decline in the number of people putting their homes up for sale.

“Many Americans are stuck because they’ve already moved and had very low mortgage rates during the pandemic, so they have little incentive to move today.”

The median US home price rose 8 percent year-on-year in September to $403,797.

Mortgage buyer Freddie Mac reported on Oct. 13 that the average key 30-year yield rose to 6.92 percent, from 6.66 percent last week.

More than 60,000 purchase agreements were canceled last month, which corresponds to 17 percent of the homes that have been contracted.

The largest declines in home prices occurred in New Orleans, where they fell by 5.7 percent.

Two Californian cities — Oakland and San Francisco — came in second and third, with a 2.1 percent and 1.9 percent drop, respectively.

Boise, Idaho saw the largest price declines in the entire metropolitan area, with more than two-thirds (67.8 percent) of homes for sale cutting their prices in September.

El Paso, Texas, saw the highest price gains, rising 23 percent year over year to $245,950.

Next came West Palm Beach, Florida, where prices rose 22.2 percent; Greenville, South Carolina (19.3%); and Miami (17.6%).

Zhao said he expects market conditions to get worse before they get better.

“With inflation still rampant, the Federal Reserve will likely continue to raise interest rates,” Zhao said.

“That means we won’t see high mortgage rates – the main killer of housing demand – fall until early to mid-2023.”

An average American family making $71,000 can now only afford a one-bedroom, one-bathroom apartment in Manhattan under the new rates, but could have afforded a three-bedroom apartment under the old mortgage rates.

An average American family making $71,000 can now only afford a one-bedroom, one-bathroom apartment in Manhattan under the new rates, but could have afforded a three-bedroom apartment under the old mortgage rates, according to lists of silver.

In Los Angeles, the average American family could afford a two-bedroom, two-bathroom caravan at the current rate, but could have bought a 1,549-square-foot two-bedroom, two-bathroom apartment with a pool in January.

In San Francisco, an average American family can afford a 753-square-foot one-bedroom, one-bathroom apartment, but could afford a more modern, larger apartment at the old rates

In Los Angeles, meanwhile, the average American family could afford a two-bedroom, two-bathroom caravan at the current rate, but could have bought a 1,549-square-foot, two-bedroom, two-bath condo with a pool in January.

And in San Francisco, an average American family can afford a 753-square-foot one-bedroom, one-bathroom apartment, but could have afforded a more modern, larger apartment at the old rates.

Home buyers are now moving out of those expensive cities, George Raitu, senior economist at realtor.com said, noting that sales are up in the Midwest and Northeast.

In Chicago, for example, the average family could afford a 1,000-square-foot two-bedroom, two-bathroom apartment, while in Portland, Maine, they could afford a four-bedroom home.