House sales plummet to their lowest level in over a DECADE as families in large suburban homes cling...
Record-low Home Sales In 2023: 1% Properties Sold
Written by Helena Kelly, Consumer Reporter for Dailymail.com.
Posted: 8:12 PM BST, July 20th, 2023 | Revised: 9:42 PM BST, July 20th, 2023
The number of houses being sold has hit its lowest point in more than ten years, with a mere one percent of properties being bought or sold during the first six months of the year.
A recent study conducted by RedFin, a real estate firm, reveals that only a mere 14 homes were sold out of every 1,000 properties in the United States within the past six months.
The data reveals a decrease compared to the numbers prior to the pandemic in 2019, where 19 homes were sold per 1,000 during the corresponding time frame. Redfin's analysis indicates that the decline is primarily influenced by families residing in spacious suburban properties.
The numbers indicate a general decline in the real estate market, triggered by increasing mortgage interest rates.
The typical individual looking to purchase a house is currently dealing with mortgage payments that are approximately $1,000 higher per month compared to two years ago, given that interest rates remain around 7 percent.
According to data gathered by Redfin, the number of house swaps has plummeted to its lowest point in more than ten years.
As a consequence, families express a sense of being "trapped" in their current residence because of their advantageous agreements. Recently, Dailymail.com disclosed an increase in the number of "unintentional landlords" as homeowners choose to lease their properties instead of putting them up for sale.
Specialists claim that the scarcity of accessible dwellings is causing an escalation in property prices. Redfin reports that houses are still being sold at a staggering 40 percent higher than their pre-pandemic value.
In response to the most recent data, Taylor Marr, the deputy chief economist at Redfin, expressed his thoughts, stating that the sudden surge in mortgage rates has presented a challenging situation for numerous individuals in the United States who aspire to purchase a house. This predicament has resulted in limited availability of housing options and rendered the properties that are listed on the market unaffordable for many potential buyers.
He stated: 'If mortgage rates decrease to approximately 5%, it would have the greatest impact on the affordability issue as it would release more available properties for purchase and reduce monthly payment amounts.'
Families in search of spacious residences in suburban areas are witnessing a significant decline in available choices, as merely 16 out of every 1,000 expansive suburban houses in the United States were sold this year.
There has been a decrease of 33 percent in the amount of properties of this kind being sold in 2019.
Scientists observed a sudden surge in demand for these characteristics during the pandemic, which is why the decline has been exceptionally rapid.
The sudden transition to remote work led to a surge of office employees rushing to suburban areas and buying houses with additional office areas and larger outdoor spaces.
And a majority of those households were trapped in affordable mortgage rates - which stood at approximately 3 percent in 2021.
Should they decide to relocate, their interest would experience a significant increase, causing many to prefer remaining where they are.
The numbers indicate a general decline in the real estate industry, prompted by increasing mortgage interest rates. Dailymail.com examined the surge in the price of an average residence over a period of two years.
Last year, mortgage rates surged as a result of the Federal Reserve's assertive approach towards interest rates.
According to real estate agent Heather Mahmood Corley from Phoenix, the most desirable properties among buyers are those well-prepared houses of medium size, located in areas known for their excellent schools.
These particular items pose a real challenge to locate because in order for someone to purchase one, there must be someone willing to sell one. Unfortunately, this is not currently happening due to the large number of homeowners who are benefiting from low mortgage rates.
Following the increase in mortgage rates, which is the highest observed throughout this year, this development is now taking place.
Mortgage interest rates surged the previous year due to the Federal Reserve's bold approach in manipulating interest rates.
The Federal Reserve, in an effort to control skyrocketing inflation, has increased its funds rate on ten occasions within the past fifteen months.
However, in June, the bank declared a temporary break on raising prices in order to acknowledge the recent decline in inflation, which fell to 4 percent.
Nevertheless, the interest rates provided by lenders for mortgages are not directly linked to the Federal Reserve's rates for funds. Instead, they are determined by the yield on 10-year Treasury bonds.
This is impacted by a blend of rising prices, Federal Reserve actions, and the reaction of market participants.
Mortgage rates surged in the previous year as a result of the determined interest rate approach undertaken by the Federal Reserve.
The Federal Reserve has increased its funds rate on 10 occasions within the past 15 months as an effort to control the soaring levels of inflation.
However, the bank declared a temporary halt to increases in order to acknowledge the recent decrease in inflation, which dropped to 4 percent.
Nonetheless, the interest rates provided by lenders for mortgages are not directly linked to the Federal Reserve's funds rates, but instead influenced by the returns on 10-year Treasury bonds.
This is impacted by a mix of rising prices, Federal Reserve actions, and the reaction of investors.
