U.S. home sales fall to lowest since 2010
Home sales are at their lowest since the Great Recession housing bust.
Why it matters: Housing is a huge part of the economy — it's about 17% of GDP if you include a broad bucket of activities like home purchases, remodeling, renting and construction.
Driving the news: The National Association of Realtors' latest report on sales of previously owned homes showed another downturn, putting the number of sales in October at an annualized rate of 3.79 million.
- That was worse than analysts had expected. The consensus view was that sales would hit a 3.9 million rate during the month.
The big picture: The U.S. housing market is still struggling to adjust to a rapid surge in interest rates that pushed the 30-year fixed mortgage rate to about 8%, drastically changing the cost calculus for the vast majority of homebuyers.
Between the lines: Inventory of homes for sale is still low by historical standards, suggesting there's little reason for sellers to cut prices.
- Yes, but: On the other hand, mortgage rates have fallen a bit lately, with the 30-year fixed dipping below 7.5%.
What they're saying: "While we think mortgage rates have now peaked after rising close to 8.0% in October, we expect them to remain elevated. This will mute any recovery in demand and sales volumes over the next couple of years," Capital Economics analysts wrote in a note published Tuesday.