Existing single-family homes sales in Florida again fell in November, this time dropping 38.2% over the same time period last year. Condominium and town house sales didn’t fare any better, falling 38.9% in November compared with last year.
The data, released by Florida Realtors on Wednesday, Dec. 21, is further proof that the housing market, which just a year ago was so active that thousands of potential buyers were left unable to even compete for a shot at buying a house, is cratering as interest rates continue rise.
Nationally, the news wasn’t any better. Existing home sales across the country were down 35.4% in November from a year ago and 7.7% from October, according to the National Association of Realtors. It was the 10th straight month home sales fell nationwide.
The reason for the drop falls squarely on the shoulders of rising interest rates which have made buying a home an unaffordable proposition for many buyers. According to Freddie Mac, the 30-year-fixed rate mortgage was 6.31% as of Dec. 15, down from the previous week’s 6.33% average but still more than double the 3.12% it was a year ago.
The 30-year fixed rate topped 7% (7.08%) in October for the first time since April 2002.
The 15-year fixed mortgage rate was 5.54% on Dec. 15, down from 5.67% the previous week but well over the 2.34% it was a year ago.
Brad O’Connor, the chief economist for Florida Realtors, says in the announcement that “we could already see that conditions were worsening in response to the rise in rates above 6% in October’s housing market data.”
“Based on those figures, it’s not surprising that the newly released November figures for closed sales from Florida Realtors exhibit similar declines — and we should probably expect similar declines in closed sales in December, as well, given that rates were at their recent peak near 7% for much of November, when many of the homes scheduled to close in December were going under contract.”
If there is any positive to be taken from the data, it is that inflation is going down and that rates have shown a steady decline falling for the fifth consecutive week. This has led to a “stabilization in purchase demand,” says Sam Khater, Freddie Mac’s chief economist.
But, as is the case with the economy as a whole, most every piece of good news is tempered with grim truth.
“The bad news,” says Khater, “is that demand remains very weak in the face of affordability hurdles that are still quite high.”