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Tuesday, April 16, 2024

Home Sales Hit 30-Year Low in 2023 Due to Frustrating Mortgage Rates


LOS ANGELES — The housing market in‌ the United States ⁣has seen a significant decline in sales of previously owned homes in 2023, reaching a nearly 30-year low. This has been attributed to the ⁤combination of sharply higher mortgage rates, rising prices,⁤ and a persistently low level of homes on the market,‍ making⁤ homeownership unattainable for many Americans.

Last‌ year, existing U.S. home sales totaled 4.09 million, marking an 18.7%⁢ decline from 2022. This is the weakest year for‍ home sales since‌ 1995 and the biggest annual decline since 2007, during the‍ housing⁣ slump of‍ the‌ late 2000s. ⁢The median national home ‌price for all of last ⁢year edged up ‍just⁣ under 1% to a record high ⁢of $389,800.

The decline in home sales in⁣ 2023 mirrors ‌the nearly‌ 18% ‍annual decline in 2022, which began when mortgage rates started ​rising and‌ eventually more than doubled by the end of the year. This trend continued ​in 2023, with⁢ the average⁤ rate on a ⁣30-year mortgage reaching 7.79% by late October, the‍ highest ⁣level since late 2000.

However, there is hope for a rebound in‍ home ⁣sales, as mortgage rates have ‍been⁢ easing since November, echoing a pullback ⁢in‍ the 10-year Treasury yield. The ⁢average rate on a 30-year home loan was 6.6% this week, according to mortgage buyer Freddie Mac. ‌Many economists expect rates to continue to ease, which ⁤should help boost demand heading into the spring homebuying season.

Despite the easing mortgage rates, the housing market ⁤is​ still ​facing a demand-supply imbalance, with just ​1 million homes‍ on the market at the end of December. This is a 4.2% increase from a year earlier, but well below the monthly historical average of about 2.25 million. The available inventory at the end ⁣of last month amounts to a 3.2-month ⁣supply, down 3.5% from the previous month.

As a result, homebuyers are ‍likely to face intense ⁤competition for the relatively few homes on the market, which should keep pushing up prices.​ First-time homebuyers, in particular, are finding it ⁣challenging to enter ⁣the housing market, accounting for ‍just 29% of all homes sold last month, down⁣ from 31% in November and December 2022.

Despite these challenges, there is optimism that the housing market will begin⁣ to bounce back from its dismal showing in 2023. With mortgage rates expected to continue easing and more inventory expected to ⁣appear on the market in the upcoming​ months, there is hope for a turnaround in the housing market.

Truth Media Network
Truth Media Network
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  1. Disagree! Mortgage rates may be frustrating, but the low home sales can also be influenced by other factors like market trends and economic conditions.

  2. Agree! Mortgage rates play a significant role in the housing market, impacting affordability and buyer demand. It’s crucial for policymakers to address this issue to revive home sales and stabilize the market.


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