The Balance Today: News You Need To Know on Nov. 18, 2022

Home Sales Drop Again As Buyers Say "No Thanks"

A family sits on the floor of a new home with moving boxes behind them.
Photo:

Thomas Barwick / Getty Images

Have you wanted to buy a house recently, only to see the prices and the high mortgage rates and say, ‘No thanks?’ If you did, you aren’t alone. Sales for homes fell for the ninth straight month as higher mortgage rates make buyers think twice before purchasing a house. According to the National Association of Realtors, home sales dropped 5.9% in October from the previous month and are sitting 28.4% lower than last year.

As the Federal Reserve hiked interest rates to help curb inflation, which has remained stubbornly high, it’s sent mortgage rates soaring. While the average interest rate on a 30-year fixed-rate loan recently eased to 6.61% according to Freddie Mac, rates had been sitting above or near 7% for the last several weeks. 

Concerns about future rate hikes have kept investors nervous and markets jittery. Yesterday, several policymakers from the Fed spoke about inflation and several struck a more hawkish tone (meaning, wanting to increase interest rates). This caused markets to fall on worries that perhaps, we could get another super-sized hike of 75 basis points at the Fed’s next policy meeting in December.

But markets leveled out today, with strong earnings from major retailers including Gap and Ross Stores reporting better-than-expected results pointing to consumer resilience heading into the key holiday season, despite higher prices. 

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