Mortgage Rates Rise Above 7% For The First Time This Century Tanking Home Sales

Wall Street Journal reports that as mortgage rates rose above 7.1% this week for the first time this century, home sales in September by 17.6% compared to September 2021. Initial October new home sales data for October show the steep sales decline based on the basic doubling of long term mortgage rates has contributed to a drop of over 30% in home sales so far this year.

While it was an established policy goal of the Fed, through its tightening of interest rates, to cool off the housing market nationally and in overheated markets, many in the Western United States, a 30% drop in new home sales and mortgage origination over a ten month period is not a normal indication of a ‘soft landing’ as has been hoped for by nearly all market participants.

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