Online real estate brokerage firm Redfin reported that home sales in the U.S. hit their lowest level since 2014, excluding the COVID period in 2020.
Home sales rose only 1.3% in September, while pending home sales fell 4% in the same month, the biggest decline in 3 years.
Redfin says mortgage rates at 7% are a main reason sales are slowing.
“It’s not surprising that when rates climb above 7%, fewer people buy homes because fewer people can afford them,” said Chen Zhao, Redfin’s head of economic research.
A Wall Street Journal feature story explained how, in a sluggish housing market, home sellers may cut prices.
Ed Brady, CEO of the Home Builders Institute (HBI), warns that today’s housing slowdown could become tomorrow’s construction labor crisis.
Here’s why: As homebuilders pull back, America’s AI boom, data centers, manufacturing and infrastructure projects are aggressively competing for the same electricians, HVAC technicians and construction workers. Once those skilled workers move into other industries, it won’t be easy to bring them back.
Brady sees a dangerous scenario ahead: Housing demand rebounds, but the workforce needed to build new homes doesn’t. That could mean higher construction costs, longer building timelines, and another blow to housing affordability.
