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American existing home sales head south for sixth month in a row
In September, American home sales went down by the most for more than two years due to the fact that the housing market kept struggling notwithstanding strength across the broader American economy.
On Friday, the National Association of Realtors told that existing home sales sank by about 3.4% to a seasonally updated annual rate of nearly 5.15 million units in September.
Home sales have been going down for six months. A dearth of properties for sale ramped up prices, thus sidelining a great number of potential homeowners. The South demonstrated the most impressive tumble in sales, while the sink in the West left sales amounted to 12.2% from 2017.
According to some leading market experts, the overall slump had to do with a jump in interest rates.
Besides this, supply has also been affected by soaring building material costs and also land as well as labor shortages. Meanwhile, soaring mortgage rates are anticipated to step down demand.
In September, the Federal Reserve had borrowing costs lifted for the third time in 2018 and it’s widely anticipated to proceed with its rate lifts in December.
Market experts in a recent interview by Reuters had predicted existing home sales sinking to 5.30 million from a previously disclosed 5.34 million. By the way, existing home sales occupy nearly 90% of American home sales.
In September, there were 1.88 million houses on the market, which appears to be a 1.1% leap from 2017.
At September's sales tempo, it would take up to 4.4% to have the current inventory cleared. A supply of 6-7 months is considered to be a rational balance between demand and supply.
As a matter of fact, the median house price surged by 4.2% from 2017 hitting $258,100 in September.
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