Since our last writing the housing market has caught a winter chill.
Sales of previously owned U.S. homes fell for the tenth straight month in November, extending a record decline brought upon by higher mortgage rates that continue to stifle affordability.
The National Association of Realtors reported that new contract closings decreased 7.7% in November, the most since February, to an annualized pace of 4.09 million. This drop in sales, which extends the longest string of declines back to 1999, underscores the impact high mortgage rates are having. The deep freeze has both buyers and sellers sidelined.
Rising mortgage rates that have doubled from a year ago slow buyers, while sellers are unwilling to give up their low-rate mortgages to double up their cost for less than double the house.
Applications to build homes, a proxy for future construction, decreased in November by 11.2% due to the same reasons noted before. It has been a challenging environment as the high cost for labor and construction materials has put pressure on builders trying to preserve margins.