The U.S. housing market continues to face challenges as home sales decline, prices skyrocket, and the inventory of available homes diminishes. Data from the National Association of Realtors (NAR) reveals a concerning picture of the state of the housing market, reflected in several key charts.

According to the NAR, the annual rate of home sales in October 2022 was down nearly 15% compared to the same period the previous year. The sales rate for the month stood at 3.79 million, marking the eighth consecutive month of declining sales. This figure is almost half of the levels seen in early 2021 and the lowest rate recorded since August 2010.

One significant factor contributing to the market's slowdown is the soaring prices of homes. The data from NAR highlights that the median home price in 2019 is nearly double what it is today, illustrating a substantial increase in just a few years. This surge in prices has made it increasingly challenging for potential buyers to enter the market, with inflation eroding the purchasing power of many households.

Although rising prices affect regions across the country, the Northeast experienced the most significant increase in home prices over the past year. Unfortunately, this region also saw a substantial decline in sales, with a drop of almost 17% in October. The states in the Northeast, from Pennsylvania to Maine, are grappling with the impacts of high prices and decreased buyer confidence.

The Federal Reserve's proactive measures to combat inflation have resulted in interest rates being raised more than 11 times since March 2022. Higher interest rates make borrowing money more expensive, impacting buyers who rely on mortgages for their home purchases. Data from Freddie Mac reveals that interest rates on both 15-year and 30-year fixed-rate mortgages are currently at their highest levels since the early 2000s. However, there has been a recent decrease in interest rates in the past few weeks.

Another prominent factor contributing to the slump in the housing market is the low inventory of available homes. Data from Realtor.com indicates that active listings are currently approximately half of what they were in 2019. Although there was a slight increase in inventory during October, the number of unsold homes also rose, indicating a lack of buyer demand.

These multiple challenges, including declining home sales, skyrocketing prices, high borrowing costs, and diminished inventory, collectively contribute to the current slump in the U.S. housing market. As potential buyers are pushed to the sidelines, industry experts will be closely monitoring the market and examining potential solutions to stimulate growth and stability in the coming months.