REALTOR.COM: THE GREAT SLOWDOWN: 10 CITIES WHERE HOMES SALES ARE DOWN THE MOST
If the housing market of just a year ago still seemed to be moving at quantum speed, today it’s more akin to an interminable traffic jam—with no exit ramps or HOV lanes in sight.
As higher mortgage rates have made buying a home ever more expensive, the pool of buyers who can afford to purchase real estate has dried up. Nationally, the number of existing-home sales plummeted 36% in November compared with a year earlier, according to a Realtor.com® analysis of CoreLogic data. (The data did not include sales of new-construction homes.) There were 395,000 sales in November 2021 compared with 251,000 one year later.
So home sales have declined by a third across the U.S. But where are they down the most? The data team at Realtor.com found the parts of the country with the steepest declines in transactions.
These were often the COVID-19 pandemic hot spots, particularly in the Sun Belt stretching from California to Florida where buyers flocked to over the Past few years and bid up prices to unthinkable heights. Newtonian laws of real estate ultimately prevailed: Markets that went way up ultimately fell back down to earth, hard.
Mortgage rates peaked at over 7% in late October and November—more than double what they were just a year earlier. Remarkably, that made the average monthly payment about 75% more expensive* than what it was a year ago. Buyers who needed a mortgage to purchase a home understandably balked, and sales dried up.
“This shows how sensitive buyers are to mortgage rates,” says Selma Hepp, chief economist for CoreLogic.