(KNSI) – The National Association of Realtors says the housing market is frozen.
New data for existing home sales came out Wednesday showing a 7.7% drop in purchases for November from the month before. The annualized, seasonally adjusted rate is just 4.1 million homes, which is 35% lower than the same time last year.
Higher interest rates and a potential recession are causing buyers to shy away. Inventory is also low as homeowners feel little incentive to list a property. Right now, it is sellers who are losing out in the push and pull between the two dynamics. The average sale price is down over 10% since the summer.
The median existing home price has fallen to $370,700, a greater than 10% drop from $413,800 in June. Prices are still above last year, but the growth rate of 3.5% is the lowest in a long time.
NAR Chief Economist Lawrence Yun says, “In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020.”
Existing home sales make up about 90% of the United States housing market. As it softens, it sends a strong signal to home builders to pull back on construction of new residences and apartment complexes, which affects a significant source of hiring in the labor market.
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