Sharp drop in home sales – just as bad as during the financial crisis

Sharp drop in home sales - just as bad as during the financial crisis

Home sales in California fell 21 percent in June, compared to the same month last year. The decline is characterized by an increase in mortgage rates Bloomberg.

According to the California Association of Realtors, “This was the largest drop since California’s three-month shutdown in 2020.”

Barring a pandemic drop in 2020, sales in June were at their lowest level since April 2008, when the housing bubble burst after banks granted so-called subprime mortgages to borrowers that was not creditworthy.

just the beginning

Home sales are down overall across the US, with mortgage rates nearly doubling since January. Declining sales in California, which has the nation’s most expensive housing market and wild bidding rounds, shows the gravity of the situation.

Too expensive: The price of a detached home fell to an average of NOK 8.6 million in June. Photo: Dreamstime

“With inflation continuing to rise and interest rates expected to rise further, the market will return to more normal in the second half of the year and we will see more moderate price growth,” said Jordan Levine, chief economist for the Central African Republic.

Detached house prices fell to an average of about NOK 8.6 million in June, down 4 percent from an all-time high of NOK 8.9 million in May. Prices were still 5.4 percent higher than the previous year.

Regression in housing construction

U.S. homebuilding also fell 2% in June month-on-month to a seasonally adjusted annual rate of 1.559 million homes, versus 1.585 million homes expected, according to figures from Trading Economics.

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The number of new home building permits decreased 0.6 percent month-on-month during the period to an annual rate of 1.685 million, compared to an expected annual rate of 1.65 million.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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