US Home Sales Fall to Lowest Level Since 2010

Facts

• Sales of existing homes in the US fell to a 12-year low in December 2022, according to a report from the National Association of Realtors (NAR) released on Friday.
• Sales tumbled 1.5% in December to a seasonally adjusted annual rate of 4.02M units, the lowest level since November 2010. This was also the 11th month in a row of declining sales, making it the longest such stretch since 1999.
• Sales of previously owned homes, the largest portion of total US housing sales, fell 34% year-over-year in December.
• Experts are pointing to higher mortgage rates, surging inflation, and high home prices as the reasons behind the slumping sales.
• However, those same experts are optimistic that the situation may improve moving into 2023. “Mortgage rates have fallen in the recent past weeks, so I’m very hopeful that the worst in home sales (is) probably coming to an end,” said Lawrence Yun, the NAR's chief economist.

Sources: Reuters, Al Jazeera, Al Jazeera, Cbs4indy and Cbs4indy.

Narratives

• Pro-establishment narrative, as provided by CNN. The US government and Federal Reserve are doing what they must to curb inflation and protect the economy from total disarray. Raising interest rates can be a bitter pill to swallow for some hopeful homeowners who have had to put their plans on hold until mortgage rates settle. But this is the medicine the US needs right now. 2023 may be difficult for some, but the US financial system is prepared and, as such, will be able to avoid a national crisis.
• Establishment-critical narrative, as provided by Politico. Affordability has reached a crisis point across the United States with the rising costs of everything from housing to food but stagnant wages. Slumping house sales are just one indication of this — Americans cannot afford to buy what they need. Leaders at the federal level need to recognize the impact on everyday Americans and start making changes.
• Cynical narrative, as provided by New York Times. The housing industry in the US is broken. Mortgage rates are sky-high, prices are ridiculous, and there’s a chronic lack of inventory. Americans are paying thousands more per month for housing than they otherwise should. And it's not going to get better any time soon.