U.S. home sales sink in 2022

U.S. home sales tumbled to the slowest pace in nearly a decade as soaring mortgage rates and sky high prices in 2022 pushed home ownership out of reach for many Americans.

The National Association of Realtors said Friday that existing U.S. home sales totaled 5.03 million last year, a 17.8% decline from 2021. That is the weakest year for home sales since 2014 and the biggest annual decline since 2008, during the housing crisis of the late 2000s.

The median national home price for all of last year jumped 10.2% to $386,300, the NAR said, and it's up 42% from 2019, before ultra-low mortgage rates and pandemic fueled demand sent the market into a frenzy.

Mortgage rates more than doubled in 2022, climbing to a two-decade high of 7.08% in the fall as the Federal Reserve continued to boost its key lending rate in a quest to cool the economy and tame inflation. Home sales slowed from a torrid pace at the start of the year as the surge in borrowing costs limited home hunters' buying power. In 2022, first-time buyers accounted for only 26% of all home sales, the NAR said.

The average rate on a 30-year mortgage rate fell this week to 6.15%, its lowest level since September, according to mortgage buyer Freddie Mac. Still, it remains nearly double the 3.56% average rate a year ago.

Mortgage rates are likely to remain a significant hurdle with the Federal Reserve consistently signaling its intent to keep raising shortterm rates. While inflation has begun to slow, some Fed officials maintain that the central bank needs to keep hiking rates to make sure its job is done.