Home sales drop for ninth month in a row

As if to confirm the intentions of the Federal Reserve to cool the economy, the National Associations of Realtors today reported existing home sales have dropped for the ninth consecutive month. All four regions reported month-over-month and annual declines.

Nationally, sales from September to October declined by 5.9 percent. Year-over-year sales declined by 28.4 percent from 6.19 million units in October 2021.

“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher,” NAR Chief Economist Lawrence Yun said. “The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years.”

The median existing-home price for all housing types in October was $379,100, a gain of 6.6 percent from October 2021 ($355,700), as prices rose in all regions. This marks 128 consecutive months of year-over-year increases, the longest-running streak on record.

“Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers,” Yun added. “In October, 24 percent of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8 percent.”

Existing-home sales in the Western region decreased 9.1 percent from September to an annual rate of 800,000 in October, a decline of 37.5 percent from October 2021. The median price in the West was $588,400, a 5.3% increase from October 2021.

While prices have increased year-over-year in Elk Grove, Zillow forecasts local housing prices to be flat for the next 12 months. Although 30-year mortgage rates in the past week dropped from 7.08 to 6.61 percent, one year ago they were 2.98.