By Laura Kusisto and Sarah Chaney | The Wall Street Journal
Sales of previously owned U.S. homes posted their largest annual decline since 2014 in October, as the housing market continues to sputter due to higher mortgage rates that are reducing home affordability.
The latest data offered a mixed picture of a market that isn’t in free fall but also is far from robust. Existing-home sales edged up 1.4% in October from the previous month to a seasonally adjusted annual rate of 5.22 million, the National Association of Realtors said Wednesday. That broke a six-month streak when sales declined compared with a month earlier.
“Metro Phoenix Area home sales activity has slowed, finally- on the heels of slowing reported within other major U.S. metropolitan areas. Both new and existing homes sales are down, as buyers have begun to adjust to a new mortgage interest rate reality- 5%+ interest rates. Structurally, the local housing market remains healthy, but as has been the case for the last 24 months, future growth is likely to be limited to entry-level and first-move up housing segments. Move-up home sales will continue to slow, as interest rates continue to rise over the next 36 months. Appreciation, too, is likely to become more limited. We’ve recently adjusted our 2019 new home appreciation projection down to 4% in anticipation of rising mortgage interest rates.”
~Jim Belfiore, founder and president, Belfiore Real Estate Consulting