Is the US real estate sector facing a crisis due to high interest? (Getty)
Keep on real estate market In 20 of America’s largest cities, it fell during the month of October, so that real estate prices fell 1.2% from the previous month’s prices, and that the trailing month was the third in a row of declines , according to the “S&P Core Logic” Index.
The real estate market abruptly calmed down before mid-year, driven on the one hand by the increase in financial charges, with successive arouse interest From the Fed, hoping to curb the rally Inflation rateOn the other hand, after the historical highs recorded by prices in the most important market of America, in the last two years.
The interest rate applied to mortgage loans more than doubled its level at the beginning of the year, averaging above 7% for much of the second half of the year.
Since March, the Fed has raised the interest rate on its funds in six consecutive meetings, to within the 3.75%-4% range, after being close to zero earlier in the year.
And with the subsequent hike, buyers of 10-year US Treasury bills, which are the most important factor in determining mortgage interest rates, demanded interest rates above 4.25%, even though they were satisfied at the beginning of the year with an unbeatable yield. greater than 1.5%.
With this increase, interest rates on all instruments, including mortgages, increased, which sidelined potential buyers and slowed demand, forcing sellers to list fewer properties.
In a statement released on Tuesday, Craig Lazzara, chief executive officer of S&P Dow Jones Indices, said, “Given growing expectations of further macroeconomic challenges, home prices may continue to decline.”
Despite the year-on-year increase in house prices, data released showed a slowing rate of increase from last year.
The nationwide home price index showed a 10.6% increase in September over the same month last year, after a similar rise the previous month was close to 13%, according to Bloomberg.
Of the 20 U.S. cities whose prices the index surveyed, Miami and Tampa, Florida, as well as Charlotte, North Carolina, experienced the largest annual price increases through September, while San Francisco, California, and Seattle, Washington posted the weakest gains.
