The results of the survey published in Feb. 21 noted that existing home sales in January 2023 fell to four million, compared to 6.34 million in January 2022.
NAR Chief Economist Lawrence Yun said: "Home sales are bottoming out. Prices vary depending on a market's affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines."
While the NAR's findings pointed out that the decrease was nationwide, the western U.S. had the most pronounced fall – with home sales in the region falling by 42.4 percent year-on-year. The median home price in the Western region is the most expensive in the country at $525,200, which dropped by 4.6 percent compared to the price in January of last year.
Other regions also reported similar drops in home sales, as per the NAR.
The Northeast region where homes cost $383,000 on average reported a 35.9 percent fall. The Midwest, where homes cost $252,300 on average, saw a 33.3 percent drop in home sales. The South, where homes cost $332,500 on average, reported a 36.6 percent drop.
The median price for existing homes of all types increased to $359,000 in January of this year. This equated to a 1.3 percent increase from the price in January 2022, which was recorded at $354,300.
Stubbornly high mortgage rates to blame for lower home sales
Writing for the Daily Mail, contributor Harriet Alexander pointed her finger at stubbornly high mortgage rates for the sluggish home market. To illustrate her point, she mentioned that a 30-year fixed mortgage will currently be at 6.32 percent, which is way higher than the three percent and below rates back in 2020. By mid-2022, rates skyrocketed to six percent. (Related: Mortgage rates surge to 20-year high, causing massive drop in home sales.)
"Homes are sitting on the market longer," said Yun. "But there are fewer fresh listings coming to market this January compared to last January due to homeowners loving their low-interest rate and not wanting to give it up and put their home on the market."
Meanwhile, houses remained in the market for 33 days in January of this year, which is an increase from 26 days in December 2022. This created an opportunity for home buyers to haggle and negotiate. According to the NAR chief economist, homes sitting on the market for more than 60 days can be purchased at a 10 percent discount.
Moreover, there were 980,000 previously owned homes on the market, up 2.1 percent from December and 15.3 percent from a year ago, according to CNBC. But this primarily reflected homes staying on the market longer than in prior months. New listings remained low.
In early February, NAR analysts found 20 major U.S. cities that have seen house prices fall in the past year. Four of these cities were in California.
"A few markets may see double-digit price drops, especially some of the more expensive parts of the country, which have also seen weaker employment and higher instances of residents moving to other areas," Yun remarked about this finding.
Ultimately, the NAR chief economist said the housing market slowdown represents a break from markets that saw a massive price boom during the Wuhan coronavirus (COVID-19) pandemic.
"A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42 percent in the past three years," said Yun. He also noted these cost increases have far surpassed wage increases and consumer inflation since 2019.
Visit HousingBomb.com for more stories related to America's collapsing housing market.
Watch this video about the NAR survey's finding that housing sales nationwide took a nosedive.
This video is from the Rudyk Report channel on Brighteon.com.
More related stories:
30-year fixed mortgage rate surges above 7% as the Fed continues to raise interest rates.
Home buyers hesitate as US mortgage rates soar to 16-year high.
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