The United States housing market declined by about 2.2 percent due to a lack of homes for sale and high prices, according to The Wall Street Journal.
Home sales were rising in July and August after the first half of the year showed the housing market declining. However, on Tuesday the National Association of Realtors (NAR) reported that sales of previously owned homes in the U.S. fell 2.2 percent in September from August to a seasonally adjusted rate of 5.38 million.
The market rejoiced in the past couple of months prior to September as a result of falling mortgage rates, larger selection of homes on the market, and a slowdown in the growth of home pricing. Unfortunately, the larger selection of homes on the market and slowdown in the growth of home pricing were short-lived and helped contribute to the September fall back.
“You can sit there and go, ‘Oh my god, look how low mortgage rates are.’” said Tom Lawler, founder of Lawler Economic and Housing Consulting. “But then you go, ‘Look how high home prices are.” The median price for a home in September was $272,100, an increase of 5.9 percent from one year prior. Furthermore, according to the NAR, the number of homes listed on the housing market declined by about 2.7 percent from a year prior.
Freddie Mac reported that the average interest rate on a 30 year fixed rate mortgage at the end of September was 3.64 percent, down from 4 percent 6 months ago. Although, analysts predict that the effect of the lower mortgage rates will take longer to work their way into the housing market. Yvette Evans, a Redfin agent in Austin, stated, “With interest rates dipping down people were refinancing instead of moving.”
The housing market declined in September after rebounding the past two months thanks to a decrease in homes on the market and increasing prices, but analysts predict that the effect of lower mortgage rates will take a while before its effect helps bolster the market.