Second-hand home sales in the USA hit their lowest level since 1995 last year, due to the impact of rising mortgage (home loan) interest rates and low housing stock.
The National Association of Realtors (NAR) announced second-hand home sales data for December 2023. Accordingly, second-hand house sales in the country decreased by 1 percent on a monthly basis, seasonally adjusted, to 3.78 million in December last year. Second-hand house sales, which decreased above market expectations, were expected to increase by 0.3 percent to 3.82 million in this period.
Second-hand house sales, which fell to the lowest level recorded since August 2010 in the said period, were recorded as 3.82 million, with an increase of 0.8 percent in November last year. Second-hand house sales in the country decreased by 6.2 percent in December last year compared to the same month of the previous year.
Median house prices in the second-hand market in the USA increased for the 6th month in December last year and increased by 4.4 percent to 382 thousand 600 dollars.
Housing prices reached record levels last year
Last year, second-hand house sales decreased by 19 percent to 4.09 million, falling to its lowest level since 1995, while median house prices reached a record level of 389 thousand 800 dollars in 2023.
NAR Chief Economist Lawrence Yun, whose views were included in the statement, stated that housing sales bottomed out in the last month of last year before rising in the new year.
Yun stated that mortgage (housing loan) interest rates have decreased significantly compared to just 2 months ago, and the housing stock in the market is expected to increase in the coming months.
Pointing out that the rapid increase in housing prices in the last 3 years is not sustainable, Yun said, “It is very important to create a path to homeownership for today’s tenants. It requires economic and income growth and, most importantly, stable housing construction.” he said.
The aggressive monetary policy tightening implemented by the US Federal Reserve (Fed) against high inflation also increased mortgage interest rates last year. The average interest rate for a 30-year mortgage (home loan) in the USA approached 8 percent last year.
The housing stock remaining at low levels prevented housing prices from falling despite the decrease in demand.
