Home sales have dropped to dramatic lows, families being priced out of housing market

JACKSONVILLE, Fla. – For the first time since the foreclosure crisis in 2010, home sales have dropped to dramatic lows. And climbing interest rates mean some families are being priced out of the market. We checked and as of Friday, the average rate on 30-year mortgages jumped to 7.99% this week, which is up from last week.

Home sales across the country are moving at the slowest pace since October 2010. That was during a recession, a time when the real estate market was in the midst of a foreclosure crisis. We asked Northeast Florida Association of Realtor President, Diana Galavis, if current market trends are an indicator of yet another housing crisis on the horizon.

“So, I don’t believe so. One difference that we have is we don’t have the inventory to support the homes being on the market and potentially going into a short sale or foreclosure status. Of course, interest rates are up. We are seeing people’s journey take a little longer to shop for homes. But we are at a historic low for housing, specifically affordable housing,” Galavis said.

According to the latest NEFAR data in Northeast Florida’s six-county region:

• The median price in September for a single-family home was $379,500

• But the number of days homes are staying on the market rose 22.6%

• Closed sales dropped 14.8%

• Pending sales fell 10.4%

Galavis said the current market trends are a direct reflection of increasing interest rates. She also said Northeast Florida’s existing sellers’ market is slowly shifting towards a market that benefits the buyer, the most.

″We are still in a seller’s market. But as I would like to say buyers are in control, with the interest rates going up just a tick, people are able to shop a little longer or take their time, and the inventory is starting to come on the market. But it is still a seller’s market, but buyers and control,” Galavis said.

Galavis said buyers are still experiencing competition on local properties and bidding wars on attractive local homes. But because interest rates are so high, first-time home buyer sales are dwindling. Galavis said there is a silver lining however for those who qualify for federal assistance.

“Well, the major factor is our affordability. It has been at an all-time low. So that is a factor in that. But the good news for people entering the market is that there is down-payment assistance programs out there, so that really does help.”

With the Fed indicating that mortgage rates will stay “higher for longer,” analysts expect more monthly drops in home sales through the rest of the year, which means overall, sales could be down 20% from last year.