Sales of existing homes have fallen for an 11th straight month as the housing market cools.
The hit to the housing market reflects the Federal Reserve's efforts to lower inflation by raising interest rates, which has jacked up mortgage rates and put home buying out of reach for many.
While the decline did mark another consecutive month of flagging sales, it was less profound than the negative 5.4% that was expected by forecasters.“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said NAR chief economist Lawrence Yun. “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.
Despite the fast-falling number of sales, prices of homes are still high, although price growth is slowing. The median price of an existing home in December was $366,900, a growth of 2.3% from the year before. The numbers are a result of the Fed raising interest rates in order to tamp down inflation. When the Fed raises interest rates, it causes mortgage rates also to rise and make housing more unaffordable and buying less attractive.
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