In December, the decline in the U.S. housing market persisted, as reported by CNBC. Sales of existing homes experienced a 12th consecutive monthly drop compared to the previous year. Despite this ongoing trend, industry experts are cautiously optimistic, pointing to potential signs of a spring rebound, fueled by easing mortgage rates and a gradual increase in inventory.
The CNBC report indicates a 1% decrease in sales from November, resulting in a seasonally adjusted annualized rate of 3.78 million units – the lowest since August 2010. When compared to December 2022, the decline was more pronounced at 6.2%, culminating in a year-end total of 4.09 million units, marking the poorest performance since 1995.
Regional variations were evident, with sales remaining stagnant in the Northeast and declining in the Midwest and South. However, a surprising 7.8% surge in the West provided a glimmer of hope amidst the overall downturn. Lawrence Yun, the chief economist at the National Association of Realtors (NAR), attributed the overarching decline to elevated mortgage rates, which reached a peak of around 8% in October before moderating to the 7% range in November. Presently, rates have eased further, settling at a more favorable 6.89%.
While the housing market continues to face challenges, the prospect of a more favorable mortgage environment and a modest uptick in housing inventory suggests a potential turnaround in the coming months. The West’s unexpected surge in sales adds a positive note to the narrative, offering a ray of hope for a broader market recovery. The dynamics of mortgage rates, being more accommodating, are viewed as a key factor that could contribute to a rebound in the spring.
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