US existing-homes sales decrease to cap worst year ever

About 56 percent of the homes that were sold had been listed on the marketplace for less then a month. Property was on the market 29 days as opposed to 25 in November.

This week’s data revealed that the number of mortgage applications has risen to its highest level since July. Homebuilder optimism has also increased, which is expected to help boost the supply of new construction.

The housing industry, which is one part of the economic system that is most sensitive to interest rates and costs, has been in turmoil since last year’s Federal Reserve hiked borrowing costs up to their highest level ever.

Policymakers began to focus on cutting mortgage rates. From a peak rate of nearly 8 percent in October, rates have dropped. Yet many homeowners are still hesitant about selling their houses and moving until rates have fallen further.

The most recent month’s sale looks to be a bottom before sales rise in the upcoming year. Mortgage rates were significantly lower two months ago and it is expected that more inventory will appear in the future.

Sales of US homes that were previously owned fell in December, capping off the worst housing year in more than three decades.

Pinetree Hill at Pine Grove by UOL Land

The number of homes owned by previous owners for sale fell to 1,000,000 last month, its lowest level since the beginning of March. If sales continue at their current rate, it will take 3.2months to sell the entire inventory. Realtors consider that anything less than five month’s supply is indicative of an extremely tight resale.

New projections predict that it will take years to reach the sales levels of the pre-pandemic period. They cite the high costs of homes in comparison to peoples’ incomes.

A lack of inventories is a factor that keeps prices elevated. The median sales price in December rose to US$382,600 over a period of a year, reflecting the increase in all four regions. Prices reached US$389800 as a high in 2023.

The majority of sales are for existing homes. These purchases are based primarily on the closing of contracts. Data on new-home purchases, which include contract signings are due to be released next week.

National Association of Realtors’ (NAR) released data on Friday (19th Jan). Sales in 2023 are expected to be the lowest since 1995.

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