The Balance Today: News You Need To Know on Sept. 28, 2022

Yesterday, I mentioned that home price growth was starting to slow. Today, more data shows that the cracks in the housing market are growing wider. Home sales dropped 2% last month, the National Association of Realtors (NAR) announced this morning, the third straight month of declines. Since last year, these pending home sales have dropped over 24%. 

In fact, the NAR expects that existing home sales will drop by more than 15% this year, while new home sales could fall 20.9%.

And is it any wonder? The average rate on a 30-year fixed-rate mortgage has soared to 6.29%, according to mortgage originator Freddie Mac, which over the lifetime of a loan could cost a homeowner a few hundred thousand dollars more, compared to what they would have paid on a 30-year loan taken out this time last year.

So here’s what this means: If you’re interested in selling your home, be prepared for fewer interested buyers to show up at your open house, buyers backing out of deals, and even sales falling through as ever increasing mortgage rates discourage more prospective homebuyers from taking loans. 

And if you’re looking to buy a home, less competition from other buyers could help you get a house for a lower price. But not by much. Again, home prices aren’t expected to “crash,” so if you’re waiting on that, think again.