Home sales in the United States dip for 10th straight month in volatile market

The real estate market in the United States has taken a major hit due to the Covid pandemic and it continued to show signs of concern as the sales of existing homes went down for the tenth consecutive month in November. This is the first time that such a trend has been observed in the US market with mortgage rates reaching new heights. The situation was also impacted by the increase in the central bank lending rates and the resultant inflation has resulted in more reluctance among potential buyers.

At present, the sales of houses have dropped by 7.7 per cent in the last month and the data provided by the National Association of Realtors (NAR) showed that the fall is around 35.4 per cent in the last year.

"In essence, the residential real estate market was frozen... resembling the sales activity seen during the Covid-19 economic lockdowns in 2020," NAR Chief Economist Lawrence Yun said in a statement.

In order to control the inflation in the current market, the United States Federal Reserve decided to hike its interest rates. As a result, the interest rate for a 30-year fixed-rate mortgage jumped to somewhere around 6.3 per cent – almost twice as compared to the same period in 2021. This potentially acted as a sign of warning for most buyers who are most likely waiting for the rates to normalise once again.

Available housing inventory also "remains near historic lows," said Yun.

House prices have also grown up and according to the data, it is over 3.5 per cent more than what it was in 2021. That is also one of the major reasons behind the massive fall in sales.