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Home sales are poised to experience their most significant slowdown since 2011 amid a weakening U.S. economy. That’s according to a new forecast by Fannie Mae that anticipates home sales dropping to just 4.8 million in 2023, marking the slowest sales environment in more than a decade.

That figure is expected to improve slightly in 2024, with total home sales reaching 4.9 million. High mortgage rates, with the average rate on the 30-year fixed mortgage recently rising to 7.18%, are contributing to a sales slowdown, Insider reports.

The slump in sales is partly being influenced by high mortgage rates, with the average rate on the 30-year fixed mortgage rising to 7.18% over the last week, according to Freddie Mac data. That means prospective home buyers are facing the highest cost of borrowing since 2001, which has heavily hindered demand over the past year.

Those dynamics are also taking shape in the backdrop of a weakening US economy, which is poised to enter a slowdown within the first half of next year, Fannie Mae economists predicted. The Fed has aggressively hiked interest rates over the past year to lower inflation, a move experts have warned could drive the economy into a recession.

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