US existing home sales dive to lowest since 2010 mortgage crisis

By Ovunc Kutlu

ISTANBUL (AA) - US existing home sales in December last year dove to the lowest level since November 2010 when the nation was going through a mortgage crisis in the housing sector due to toxic subprime mortgages.

Existing home sales fell in December 2022 for the 11th consecutive month to a seasonally adjusted annual rate of 4.02 million, according to the National Association of Realtors (NAR) data released Friday.

The figure, which measures the change in the number of existing residential buildings sold, was down 1.5% from November 2022 on a monthly basis and plummeted 34% annually from December 2021.

Existing home sales totaled 5.03 million in 2022, which was down 17.8% from 2021, the NAR said in a statement.

The US Federal Reserve's aggressive monetary tightening and interest rate hikes increased borrowing costs for potential homebuyers and had a negative impact on the residential real estate market overall.

"December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates. However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year," NAR chief economist Lawrence Yun said in a statement.

"Home prices nationwide are still positive, though mildly. Markets in roughly half of the country are likely to offer potential buyers discounted prices compared to last year," he added.

The median existing-home sales price rose to $366,900, an increase of 2.3% from the same month last year when it stood at $358,800, according to NAR.

The subprime mortgage crisis in the US had started with housing bubble bursting in 2007 that led to a steep decline in home prices, nationwide foreclosures and mortgage delinquencies, causing housing market-related securities plummeting in value.

After hitting the Wall Street and the American nation, the crisis rapidly snowballed to the world economy, which is now dubbed as the Great Recession.