OPINION: This article may contain commentary which reflects the author's opinion.
The number of pending home sales has fallen to its lowest level on record and is declining faster than before the 2008 housing collapse, according to a report late last week.
The UK’s Daily Mail reported that in the age of “Bidenomics” — the nickname for President Biden’s collective economic policies — pending home sales in October fell by 1.5 percent, while “transactions are declining at a faster rate than” they did during the collapse that occurred early in then-Vice President Biden’s tenure with President Obama.
“The Pending Home Sales Index from the National Association of Realtors (NAR) found transactions slumped 1.5 percent in a month. Over the year it means sales dropped 8.5 percent,” the outlet reported. “It brought the NAR’s index down to 71.4 out of 100 – its lowest figure since it began in 2001. An index of 100 indicates it is equal to the level of activity at the start of the millennium.”
According to the figures, the rate of decline was most pronounced in the West, Southwest, and Northwest – 6 percent. Sales fell 0.4 percent in the Midwest, while they declined 1.9 percent in the South. Sales rose 2.7 percent in the Northeast.
“During October, mortgage rates were at their highest, and contract signings for existing homes were at their lowest in more than 20 years,” said NAR chief economist Lawrence Yun, per the Daily Mail. “Recent weeks’ successive declines in mortgage rates will help qualify more home buyers, but limited housing inventory is significantly preventing housing demand from fully being satisfied.
“Multiple offers, of course, yield only one winner, with the rest left to continue their search,” he added.
The outlet added: Pending sales are defined as when the contract has been signed but the transaction not closed. The NAR says pending contracts are good early indicators of upcoming sales closings. However the report noted that a sweet spot in the market was homes priced above $750,000 which experts said saw a spike in sales. Newly built home sales also jumped 4.5 percent in the year to date thanks to a rise in properties being constructed.
In the age of Bidenomics, home buyers are now facing one of the least affordable markets in the modern era. Just two years ago, home mortgage rates averaged around 3.1 percent, which is less than half of what they average now after the Federal Reserve was forced to hike rates for nearly a year thus far to combat runaway inflation several economists say was exacerbated by massive government spending under Biden and two years of a Democrat-controlled Congress.
“In real terms, it means somebody purchasing a $400,000 home in November 2021 would pay around $1,623 a month for their mortgage. This analysis assumes a 5 percent downpayment,” the Daily Mail noted. “But the same buyer today faces monthly payments of $2,585 – more than $1,000 extra.”
Home prices, on average, hit another record high in September, the eighth straight month of increases. According to the S&P CoreLogic Case-Shiller US National Home Price Index – the leading measure of US house prices – year-on-year prices for homes have risen nearly 4 percent in 2023.
Polling in recent weeks shows that most voters are blaming Biden for what they feel is their worsening economic situation.
In late October, for example, a survey found that only 39 percent of voters in four key swing states—Wisconsin, Arizona, Georgia, and North Carolina—have confidence in the president’s ability to handle the economy, RealClearPolitics reported.
Steve Cortes, the chairman and founder of the League of American Workers, said in a column posted to the site that the reason 77 percent of the voters surveyed said that the nation is on the wrong track is because of the economy.
Of the 39 percent that had a favorable opinion of the president’s handling of the economy, a mere 9 percent said they gave him “strong approval.”
“So, despite the propaganda of media apologists and cherry-picking of a small set of data points that appear temporarily uplifting, voters clearly understand their tough economic slog and place blame squarely upon Biden and his allies,” the author said.