Posted on 10/28/2022 7:13:21 AM PDT by John W
Pending home sales, a measure of signed contracts on existing homes, dropped a much worse-than-expected 10.2% in September from August, according to the National Association of Realtors.
Economists had predicted a 4% drop. Sales were down 31% year over year.
This marks the lowest level on the pending sales index since June 2010, excluding April 2020, when the Covid pandemic was in its early days.
Realtors point squarely to sharply higher mortgage rates, which had sat at record lows for the first two years of the pandemic. The average rate on the popular 30-year fixed mortgage was right around 3% at the start of this year, but then rose swiftly, crossing 6% in June, according to Mortgage News Daily. It pulled back a bit in July and August, but then began rising again, crossing 7% in September, when these contracts were signed.
“Persistent inflation has proven quite harmful to the housing market,” said NAR Chief Economist Lawrence Yun. “The Federal Reserve has had to drastically raise interest rates to quell inflation, which has resulted in far fewer buyers and even fewer sellers.”
(Excerpt) Read more at cnbc.com ...
There were ominous signals beneath the GDP number once you start digging. This is one of them. The economy is not as healthy as that number suggests.
I dunno... Sometimes I feel like we may never “win” another election again. The D’s have cheating down to an artform.
Interest was 7% on a 30 year fixed last month.
Interest on a 30 year fixed could be double that in a year. I don’t know how far house prices will drop, but this could be a factor.
They don’t know what they are doing. They cause problems and destroy the economy to”save” it. Then they move the goal posts and cherry pick so they can claim they accomplished something.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
They fantasize about being Paul Voelker and slaying stagflation in the wake of the OPEC oil embargo.
Of course the situation is completely different. We at the dangerous end of a delationary period now, not the beginning. The danger zone here is depression, not runaway inflation.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.