Existing home sales fell in November for a record 10th-consecutive month, according to data released Wednesday by the National Association of Realtors, as the housing market continues to be one of the worst-hit sectors of the uneasy U.S. economy.
There were 4.09 million existing homes sold last month, dropping 7.7% from October and falling short of the roughly 4.20 million in sales economists predicted.
That’s a whopping 35.4% decrease from November 2021, when 6.33 million homes were sold.
Existing home sales are down on an annual basis at their greatest pace since May 2020, when the real estate market briefly went cold early in the pandemic before exploding, and otherwise the worst mark since November 2010, amid the Great Recession.
“The residential real estate market was frozen” this November, the National Association of Realtors’ chief economist Lawrence Yun wrote in a statement, citing “the rapid increase in mortgage rates” as the “principal reason” for real estate’s month to forget.
The 30-year fixed mortgage rate surpassed 7% for the first time in 21 years in November, according to Freddie Mac.
A rapid decline in existing home sales is just one of several worrying data points for the housing market, with new housing starts hovering at its lowest level since 2020 and new home builder confidence sitting at its lowest point since 2012 save for a brief 2020 blip. A prolonged spike in home prices during 2020 and 2021 contributed greatly to the worst inflation in the U.S. in over 40 years, spurring the Federal Reserve to increase the federal funds rate to its highest rate since the housing market crash in 2007, increasing borrowing costs nationwide, and crucially mortgage rates.
Mortgage rates have declined considerably over the past month, with the 30-year rate slipping from 7.08% to 6.31% from November 10 to December 15, still far past last December’s 3.12% rate. The dip came after the Fed backed off of its most aggressive rate hikes, increasing the target federal funds rate by 50 basis points at its most recent meeting after four consecutive 0.75% hikes.
Stocks rallied Wednesday morning as investors latched onto strong Nike and FedEx earnings reports and data revealing declining recession worries among consumers, with the Dow Jones Industrial Average up 1.7%, or 570 points, its largest daily gain in over a week.
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