The National Association of REALTORS recently reported a 1.9% decrease in sales of existing homes in the U.S. as home prices increased by 11.7%. For the first time in three months, purchases of previously owned homes fell in September.
Existing home sale prices increased year after year to $199,200 last month from $178,300 in September 2012. In addition, the number of existing homes for sale was 2.21 million at the end of September, which was an increase from 2.17 million 12 months prior. Now, experts are saying it will take longer to sell these homes due to lack of affordability.
Purchases have been declining in several regions of the U.S., with the largest decrease in the Midwest at 5.3%. The only region with high demand was the West with a 1.6% increase in sales.
The rate of 30-year home loans reached a high in August at 4.58% but the rate quickly dropped to an average of 4.28% in mid-October during the government shutdown. This may be an indication of U.S. citizens’ concerns of a potential troubled economy.
As a result of the partial government shutdown, the Federal Reserve will most likely delay the purchase of bonds, which will keep interest rates at their current levels. These high interest rates will then decrease the demand rate for the purchase on previously built homes.