US Home Sales Fall to End of Worst Year since 1995

In December the housing market had the worst year in nearly 30 years, as homes sold fell.

The National Association of Realtors published figures on Friday (19 January) which showed that closings of contracts decreased by 1% when compared to a month ago. This is equivalent to 3.78 million contracts per year. The 2023 sales are anticipated to be the lowest since 1995.

The market for housing, one of the most vulnerable areas of the economy in terms of interest rates it was in turmoil in the last year when the Federal Reserve raised borrowing costs to their highest levels since the beginning of 2000.

Since then, the attention of policymakers has changed towards lower rates. Rates on mortgages have fallen since the beginning of October, when they reached a peak of around 8 percent. A lot of homeowners are reluctant to sell or move their homes before rates drop further.

The sales over the last month have been low, before increasing again over the course of the year. The mortgage rates are dropping significantly by two months. In the coming months there will be more inventory to choose from.

 

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This week, the data showed that mortgage applications for homes increased to their highest levels since July of last year. The sentiment of homebuilders has increased, which will increase the number of construction projects that are being built.

In the month of April, the amount of homes available for sale and previously owned fell to just under one million. This is the lowest level since March. To sell all properties that are on the market at this rate it will require 3.2 months. Realtors view any supply that is that is less than five months to be insufficient.

The shortage of inventory keeps prices at a high. In December, the median selling prices increased by 382,600 dollars. The four regions all saw an increase in price. Prices reached a record record of $398,800 by 2023.

About 45% of homes sold within one month. The homes were on the market for in 29 days, as opposed to the 25-day period in November.

According to the latest projections, due to the high cost of houses compared to income, it could take a long time for the resale market return to the level it was before the pandemic.

The majority of homes are sold by homeowners who have already lived in the home and the majority of them are sold on the basis of closing of contracts. The data on sales of new homes that reflect the signing of contracts are expected to be released in the coming week.


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