According to Tejarat News, from the Business Insider website, according to Mohammad Al-Arian, the American housing market may go bankrupt, and the aggressive increase in interest rates of the Federal Reserve (Central Bank of America) last year has probably caused this problem.
In an interview with CNBC, Alliant’s chief economic advisor said: “It is possible that we have bankrupted the housing market,” referring to the high mortgage rate that has put pressure on the market.
Last week, the average fixed mortgage rate hit a 23-year high of 7.48 percent, according to Mortgage News Daily.
What are the reasons for the recession in the US housing market?
High interest rates have stagnated the US housing market over the past year, reducing supply and demand.
Many potential buyers have lost the ability to buy housing due to the increase in borrowing costs.
In addition, the people who currently own housing have stopped offering their properties for sale; Because many of them are looking for low interest rates on the loans they used years ago to buy their homes.
This has caused the prices to remain high despite the decrease in demand. (IRNA)
Decrease in housing sales in the United States
The National Association of Realtors (NAR) previously reported that US home sales fell 2.2 percent in July to a seasonally adjusted annual rate of 4.07 million.
The number of transactions on a year-over-year basis, including single-family homes, townhomes, condominiums, and cooperatives, decreased by 16.6 percent.
The median available home price for all housing types rose 1.9 percent year over year to $406,700 in July.
The total housing inventory reached 1.11 units at the end of July, which increased by 3.7% compared to June 2023, but decreased by 14.6% compared to July 2022.
Lawrence Yoon, chief economist for the National Association of Realtors, said two factors are driving current sales activity, including current inventory and mortgage rates; Unfortunately, both have been unfavorable for buyers.