U.S. Housing Market Slump Continues as Rates Rise

U.S. existing home sales in September hit a 14-year low amid higher mortgage rates and home prices. Despite improved supply, entry-level homes remain scarce, keeping prices unaffordable for many. The housing market struggles as potential buyers await better rates and economic conditions further destabilize market projections.

U.S. existing home sales plunged to a 14-year low in September, squeezed by rising mortgage rates and soaring home prices. Economists echoed a common sentiment that the housing sector's slump became more pronounced in the third quarter, influenced by elevated borrowing costs and diminished residential investments.

Jennifer Lee, senior economist at BMO Capital Markets, stated that revitalizing buyer interest will likely require further rate reductions and expanded options. The decline, down 1.0% from the previous month to an annual rate of 3.84 million units, was primarily driven by contracts secured when rates were high.

The effects of Hurricanes Helene and Milton contributed to regional variances, particularly in Florida. Meanwhile, the market reacted to fluctuating economic data and Federal Reserve policies, as mortgage rates showed a slight uptick, leading cautious homebuyers to temporarily pause.

(With inputs from agencies.)