Existing homeowners with 3% mortgages remain frozen in place, as sales fall to a new 28 year low – by New Deal democrat October marked yet another month in the fully bifurcated housing market, in which most existing homeowners are frozen in place by their 3% mortgages, and buyers have turned to new homes (and in particular condos and apartments) instead. Existing home sales fell yet again, by 16,000 annualized, to 3.79 million, 45% down from their 2021 peak, and the lowest level since 1995: This is of a piece with the collapse in purchase mortgage applications, which have also declined to 1995 levels, per Edward Yardeni: With inventory so restricted, prices have held firm, and have even increased. In October, the median price
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NewDealdemocrat considers the following as important: existing home sales, Hot Topics, New Deal Democrat, November 2023, US EConomics
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Existing homeowners with 3% mortgages remain frozen in place, as sales fall to a new 28 year low
– by New Deal democrat
October marked yet another month in the fully bifurcated housing market, in which most existing homeowners are frozen in place by their 3% mortgages, and buyers have turned to new homes (and in particular condos and apartments) instead.
Existing home sales fell yet again, by 16,000 annualized, to 3.79 million, 45% down from their 2021 peak, and the lowest level since 1995:
This is of a piece with the collapse in purchase mortgage applications, which have also declined to 1995 levels, per Edward Yardeni:
With inventory so restricted, prices have held firm, and have even increased. In October, the median price (which is not seasonally adjusted) rose for the fourth month in a row on a YoY basis, by 3.4%, to $391,800 [note: current month’s data not included in the below graph]:
For comparison, here are new home sales since 1995:
So long as the Fed keeps interest rates elevated, we can expect this trend of a frozen existing home market driving people to purchase new single family homes and condos to continue.
Sales near 25-year lows, huge divergence between New and Existing Home Sales continues, Angry Bear, New Deal democrat.