Pending home sales fell 4% on a monthly basis in November 2022 and were down 38% year-over-year as high interest rates and concerns about a 2023 recession pushed would-be buyers to the sidelines for the sixth consecutive month. Though falling sales data may seem discouraging to home builders and sellers, comparing sales on an annual basis means sizing up today’s slowdown against an unsustainable mid-pandemic buying boom.
As buyer demand dwindles nationwide, sellers are being forced to lower their asking prices in order to offload homes from the for-sale market. That trend, paired with tighter lending standards and buyers borrowing more toward their mortgages, could lead to more significant price drops in the year ahead, though experts say prices will fall regionally instead of nationally, Forbes reports.
After a boom in housing sales during the pandemic, it is only natural for a slowdown in the market. Add in higher interest rates and fears of a recession, and more potential homebuyers are sitting on the sidelines waiting for more clarity. It should not be surprising to see pending home sales decline further still. However, a larger-than-expected decrease could signal that consumers are preparing for a recession that is worse than initially expected.
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