Home Sales Drop to 1990s Lows as High Mortgage Rates Deter Buyers
• Existing home sales dropped 1% month-over-month and 6.2% year-over-year in December, reaching the lowest level since the mid-1990s • Median existing home prices rose 4.4% year-over-year in December to $382,600, continuing a trend of escalating prices • Homeowners feel "locked in" to low mortgage rates and are turning to renting out properties instead of selling them to avoid taking on a new mortgage at higher rates • The "lock-in effect" is driven by the Federal Reserve's interest rate hikes in 2022 that have kept mortgage rates elevated • Even though mortgage rates have come down from October highs, they remain too high for many prospective buyers to afford current asking prices