Housing market downturn clouds Biden’s rosy economic forecast
High inflation and rising interest rates are creating one of the worst housing markets since the 2008 crash, presenting another hurdle to President Biden’s hoped-for recovery in a sector that accounts for nearly one-fifth of the economy.
Sales of previously owned homes fell for the ninth straight month in October, down 5.9% from the previous month, the National Association of Realtors said Friday.
Existing home sales were down 28.4% from October 2021, the slowest pace since 2011, with the exception of the start of the pandemic. The streak of declines is the longest on record, forcing buyers and sellers to the sidelines amid higher prices and fewer homes available.
The dramatic slowdown in home sales comes as the Federal Reserve raises interest rates to curb inflation that hit a 41-year high last June. Home mortgage rates on a 30-year fixed loan have more than doubled this year to top 7%, although rates did retreat last week to 6.6%.
Despite the slowdown, home prices kept climbing last month. The national median home price rose 6.6% in October from a year ago, to $379,100. That’s down 8% from its peak in June but still 40% above the level before the pandemic.
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