US existing home sales still at lowest since 2010 mortgage crisis

By Ovunc Kutlu

ISTANBUL (AA) - US existing home sales fell again in January, still hovering around their lowest level since 2010 when the nation was going through a mortgage crisis in the housing sector due to toxic subprime mortgages.

Existing home sales fell in January for the 12th consecutive month to a seasonally adjusted annual rate of 4 million, according to National Association of Realtors (NAR) data released Tuesday.

This is the lowest level since October 2010.

The figure, which measures the change in the number of existing residential buildings sold, was down 0.7% from December 2022 on a monthly basis and plummeted 36.9% annually from January 2022.

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

"Home sales are bottoming out," NAR chief economist Lawrence Yun said in a statement. "Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines."

The median existing-home sales price was $359,000 in January, an increase of 1.3% from the same month last year, when it stood at $354,300, according to NAR.

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

After hitting Wall Street and the US public, the crisis rapidly snowballed to the world economy, in what came to be called the Great Recession.