Sales of existing homes in the U.S. fall for seventh consecutive month

A for sale sign stands in front of a house on Oct. 6, 2020, in Westwood, Mass. Sales of previously occupied U.S. homes slowed in August 2022 for the seventh month in a row, as sharply higher mortgage rates and rising home prices made homebuying less affordable. (AP Photo/Steven Senne)

According to a newly released report compiled by the National Association of Realtors, sales of existing homes in the U.S. fell in August for the seventh month in a row.

Sales were down 0.4% compared to the month before, and sales of existing homes were down almost 20% from the same time last year. 

The organization blames escalating mortgage rates for the continued softness in the sector.

Jeff Humphreys, head of University of Georgia’s Economic Forecasting Center, joined WABE’s “All Things Considered” to talk about what the continued decline says about the economy overall.  

Humphreys said he expects home prices to decline as much as 8% over the coming year, which likely coincides with a coming recession, but he doesn’t expect them to drop nearly as much during The Great Recession.

“Home prices have surged over the past two years, they’ve gone up so much that unless you bought your house in the last few months this is just a paper loss,” said Humphreys.

“Most mortgages are going to be well above water… The kind of home price decline I’m predicting pales in comparison with the increase we’ve seen since the pandemic ended.

The August home sales report comes just as the Federal Reserve moved today to curb inflation with another interest rate hike, which could further slow home sales.

“The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve’s interest rate policy changes,” said National Association of Realtors Chief Economist Lawrence Yun.