Existing-Home Sales on Pace to Be the Slowest Since 2008

Redfin reported on Thursday (10-19-23) that 2023 will likely end with roughly 4.1 million existing home sales nationwide. If the current pace continues, that would be the fewest existing homes sold since the housing bubble burst in 2008, following the subprime mortgage crisis.

Rising interest rates have pushed buyers to the sidelines, with mortgage applications dropping to their lowest level since 1995, Redfin says. Redfins’ Homebuyer Demand Index—a measure of tours and other early-stage demand indicators—is at its lowest level in a year. In the four-week period ending October 15th, pending home sales fell 8% year-over-year; that’s the smallest decline in a year and a half but mostly because sales plummeted at this time in 2022.

Low inventory is another factor dampening sales. There are 14% fewer home for sales than a year ago as homeowners hold on to their low mortgage homes.

Adding additional background and her analysis to the reports, Redfin Economic Research Lead Chen Zhao said:

“Buyers have been in a bind all year. High mortgage rates and still-high prices are making it harder than ever to afford a home, shutting many young people out of homeownership and causing homeowners to reevaluate whether 2023 is the right time to move. Mortgage rates are staying high longer than anticipated, keeping away everyone except those who need to move and pushing our sales projection for the year down to a 15-year low. The last time home sales were this low was during the Great Recession. At that time, tough economic conditions and slow demand pushed home prices down 30% year over year in some parts of the country, creating an opportunity for first-timers to snatch up starter homes—but this time, there’s no deal to be had.”