NEW YORK: Sales of previously owned US homes dropped to a more than 16-year low in October due to the drag from higher lending rates, a US realtors association said Thursday.
Sales fell in October by 8.8 per cent year-over-year to 3.75 million on a seasonally adjusted annual basis, according to estimates from the National Association of Realtors (NAR).
“Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023, said NAR chief economist Lawrence Yun.
“As a result, home sales fell to their lowest level since August 2010.”
The rate for a 30-year mortgage, a common mechanism for home purchases in the United States, is currently 7.18 per cent, according to mortgage finance giant Freddie Mac.
The lending rate topped the symbolically important six per cent level in February, before the start of the US-Israel strikes on Iran, which lifted energy prices and exacerbated overall inflation.
The median home price increased 0.4 per cent from one year ago to US$416,700 in October, while total housing inventory rose 4.6 per cent.
“Based on the current underwhelming home sales pace at a time of consistent job growth, there could be sizable pent-up demand if mortgage rates decline,” Yun said.