US existing home sales tumbled for a record ninth straight month in October as the 30-year fixed mortgage rate hit a 20-year high and prices remained elevated, pushing homeownership out of the reach of many Americans.
Despite the broad decline in sales reported by the National Association of Realtors yesterday, housing supply remained tight, with considerably fewer homes coming on the market than in the prior year. The housing market has been the sector hardest hit by aggressive Federal Reserve interest rate increases that are aimed at quelling high inflation by dampening demand in the economy.
Existing home sales dropped 5.9pc to a seasonally adjusted annual rate of 4.43 million units last month. Outside the plunge during the initial phase of the Covid-19 pandemic in the spring of 2020, this was the lowest level since December 2011.
Economists had forecast home sales would tumble to a rate of 4.38m units.
House resales, which account for a big chunk of US home sales, slumped 28.4pc on a year-on-year basis in October. That was the largest drop since February 2008.
The report followed on the heels of news on Thursday that single-family homebuilding and permits for future construction tumbled to the lowest levels since May 2020. Housing inventory also declined.
The 30-year fixed mortgage rate breached 7pc in October for the first time since 2002, according to data from mortgage finance agency Freddie Mac. The rate averaged 6.61pc in the latest week.
Existing home sales dropped sharply in all four regions. Sales also declined across all price points on a year-on-year basis. Even as demand weakens, housing supply remains tight, limiting the slowdown in house price inflation.
The median existing house price increased 6.6pc from a year earlier to $379,100 in October. That marked 128 straight months of year-over-year house price increases, the longest such streak on record.
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