Homes sales in the US in September fell to the lowest levels seen in ten years. It is also the eighth consecutive month where the number of house sales has fallen.
Most of the blame for the falling number of sales is being laid at the door of increasing interest rates. People are reluctant to take on borrowing when there is so much uncertainty in the markets. Interest rates have more than doubled since the start of the year, and are likely to increase further.
Rising interest rates also reduce the number of people that want to sell their homes. If people are on fixed-rate deals, then they may be reluctant to change this, as they will be facing a big jump in their monthly payments. Moving from a house would likely mean that a new mortgage deal would be needed.
Where houses are selling, they are doing so above the list price in a quarter of cases. This is because there is a lack of supply in many areas of the country. This does indicate that the markets will not behave in the same way as during the downturn of 2008-2010. During that period there were four times more houses available than there are today.
