In the housing market, indications are that the number of new homes sold in July fell to its lowest level since 2018, pushing up the supply of homes in the market to high levels.
The Census Bureau said last Tuesday that new home sales fell 12.6% since June to an annual rate of 530,000, down 36.0% from September 2021. In the market it will take about 8 months to sell at the current rate which is the longest period of time since 09/08/2009.
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The number of new homes on the market will take approximately 08 months to sell based on the current sales slump, the highest since the Great Recession. (To see a specific data point, click or hover over that area of the graph.)
The housing market is far from the sellers’ market, which improves expectations for potential buyers. High mortgage interest rates – as a result of the US Federal Reserve’s high interest rates to combat inflation – have dramatically increased the monthly mortgage payments needed to purchase a home, driving many buyers out of the market and making homes more difficult to sell. This is a situation that has led to an upward trend in house prices in recent years.
“The housing market is cooling down quickly,” Matthew Walsh, an economist at Moody’s Analytics, wrote in a comment. “The Fed gets what it wants. The housing market needed to calm down, and higher interest rates were the only thing that would have made that happen.”