April 15, 2024

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U.S. home sales last year fell sharply since 2008

U.S. home sales last year fell sharply since 2008

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Existing home sales in the U.S. last year fell at the fastest pace since the 2008 financial crisis. According to the National Association of Realtors (NAR), more than 5 million homes were sold last year, down nearly 18 percent from 2021. .

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Home sales in the US are under pressure due to big interest rate hikes by the US Federal Reserve to curb high inflation. As a result, mortgage interest rates also rise, making housing less affordable for many. As a result, home sales fell for the eleventh consecutive month in December.

Due to tight supply in the housing market, the average price of an existing home has risen. It was 366,900 dollars (338,423 euros) in December. This is 2.3 percent more than last year. Prices rose in all parts of the United States. Now that mortgage rates are weakening, NAR expects sales to pick up again this year.

34 percent decrease

In December, sales fell 1.5 percent compared to November — analysts were expecting minus 3.4 percent. It is down 34 percent in a year. That’s how the NAR comes to ‘annual’ sales of 4.02 million homes in December. This figure – used for comparison with other periods – represents the hypothetical total sales in a year if the current trend continues for 12 consecutive months.

In 2008, the US housing market was still in crisis. Banks were selling large amounts of debt securities tied to the mortgages of American homeowners. These are mostly junk mortgages, loans made to people with little or no capital. When the housing market plummeted, these bonds were no longer worth anything. This created the global financial crisis.

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