US home sales tumbled in September to the slowest pace in 3 years | House and garden

Hurricane Florence led to sales in North Carolina, but even excluding the effects of the storm, sales would have dropped more than 2 percent, NAR said. After having reached their highest level in a decade last year, existing home sales have steadily decreased in 2018 due to rapid price increases, rising mortgage rates and a shortage of available housing. .

Nevertheless, analysts are generally optimistic about the economy as a whole. Most growth forecasts will reach 3% on an annual basis between July and September, following a strong 4.2% expansion in the second quarter.

"Housing is no longer a drag on the economy, but headwinds are blowing very slowly," said Michelle Meyer, an economist at Bank of America Merrill Lynch, before the report's release.

Housing should further weaken in the coming months. The weakness in September came before mortgage rates rose again this month to reach their highest level in seven years. Sales fell 4.1% in September from a year ago.

"There is no doubt that the market has changed significantly," said Lawrence Yun, chief economist at the National Association of Realtors.

A sign of change is that the demand for existing homes is slowing down. Housing prices are increasing at a slower pace and the supply of housing available, although low, is increasing. Buyers' traffic has also declined, Yun said.

In addition, as rents are also stabilizing in many cities, many potential buyers may not feel as much pressure to buy a new home.

"Renting itself can be seen as a better deal, as rising mortgage interest rates, the steady rise in house prices, and weak wage growth are hurting the financial advantage of homeowners." a typical mortgage, "said Aaron Terrazas, senior economist at Zillow Real Estate Data Provider.

Sales have fallen the most in the West, home to most of the country's hottest real estate markets, where prices have skyrocketed for several years. Sales fell 12.2% in this region last year, compared to only 5.6% in the Northeast and 1.5% in the Midwest. They decreased by only 0.5% in the south compared to the previous year, despite a sharp decline in September due to Hurricane Florence.

Higher priced homes also report slower sales, a change from the beginning of this year, when slowdowns in sales were concentrated in mid-priced, lower-priced homes. Houses sold at $ 1 million or more saw their sales fall by 2% over the previous year.

Higher borrowing costs make housing less affordable. The average rate of a 30-year fixed mortgage has decreased this week but has remained near the peak of 7.85% recorded for seven years. A year ago, it rose to 3.88%.

There are also signs that homeowners are becoming less willing to sell up mortgage rates. Indeed, many have rates lower than 4%. The sale and the purchase of a house therefore require that they accept a higher rate.

Real estate agents surveyed consumers and found that 16 percent are not willing to give up their mortgage rate and buy a new home. This is up a typical 10 percent level.