U.S. existing home sales drop to near 30-year low
PBS NewsHourFeb 02
The Facts
Existing US home sales sank in 2023 to their lowest since 1995 amid high mortgage rates, soaring prices, and tight inventory, the National Association of Realtors (NAR) reported on Friday. At 4.09 million, they declined 18.7% from 2022.
While home sellers are "holding firm on prices," some economists are expecting this to ease as more inventory is added, with realty firm Zillow's data showing an uptick in new listings in January.
The Spin
Narrative A
With average mortgage rates considerably higher than they were two years ago and a chronic lack of inventory, the housing industry in the US shows little sign of improving. It's even worse for first-time home buyers, who historically account for up to 40% of the sales, as they have no home equity to finance their investment. This situation looks dire.
Narrative B
While the demand-supply imbalance will carry into 2024, things are set to ease up ahead in the US real estate market. Mortgage rates were already slipping by December, when they hit a six-month low of 6.61%. Meanwhile, new listings are witnessing a revival, too, which could help buyers over time.