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Existing homeowners with 3% mortgages remain frozen in place, as sales fall to a new 28 year low

Summary:
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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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:

Existing homeowners with 3% mortgages remain frozen in place, as sales fall to a new 28 year low

This is of a piece with the collapse in purchase mortgage applications, which have also declined to 1995 levels, per Edward Yardeni:

Existing homeowners with 3% mortgages remain frozen in place, as sales fall to a new 28 year low

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]:

Existing homeowners with 3% mortgages remain frozen in place, as sales fall to a new 28 year low

For comparison, here are new home sales since 1995:

Existing homeowners with 3% mortgages remain frozen in place, as sales fall to a new 28 year low

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.

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