The Commerce Department’s report on gross domestic product on Thursday will probably show that housing helped boost economic growth in the third quarter. That shouldn’t mask the fact that what is happening in the housing market is utterly and horribly bad and that the economy is worse off for it.
This past Thursday, the National Association of Realtors said that 3.96 million previously owned, or existing, homes were sold in September at a seasonally adjusted, annual rate. That was down from 4.68 million a year earlier, and even lower than the levels plumbed right after the pandemic hit. It is a symptom of the rapid rise in mortgage rates which, in addition to making it much harder to afford a home, has made people who already own homes reluctant to sell, since that would entail their financing the purchase of their next home at much higher rates than they are paying now. The report showed that there were just 1.13 million homes on the market last month, which is the fewest for a September on record.
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