Andrew Shader Explains: Why Home Sales Fell for Multiple Months in a Row This Year
Jan 8, 2023
Andrew Shader recently provided an analysis of the factors contributing to the decline in home sales across several consecutive months. His insights include an exploration of recent buyer hesitation.
Fort Lauderdale, Florida - January 8, 2023 —
Numbers released by the National Association of Realtors show that home sales fell by nearly 6% in October when compared to data from September. Additionally, existing home sales saw a 28.4% decrease year-over-year from October 2021. Real estate investor Andrew Shader reveals that this decline isn’t an anomaly; instead, it reflects nine consecutive months of falling home sales.
The largest sales decreases emerged in two ranges: homes priced between $100,000 and $250,000 and properties over $1 million. However, sales are dropping at every price point. Also, every region in the United States has been impacted. The West Coast has seen the sharpest decline, while the South and Midwest have experienced the lowest. According to Mr. Shader, there are a few contributing factors at play.
One factor that is having a clear impact on home sales is rising interest rates. In 2022, the Federal Reserve raised interest rates seven times. It also indicated plans to bump rates again in early 2023. Currently, the average interest rate on a mortgage is 6.61% on a 30-year fixed-rate loan. This rate is more than double what it was in January of this year. According to Mr. Shader, it’s absolutely understandable that many prospective buyers are pushing off buying a home.
Making things even more confusing, particularly for first-time home buyers, are sporadic short-term declines in interest rates. Because these have been intermingled with rate increases, they have added to volatility and confusion in the real estate market. Prospective buyers struggle to establish budgets for home purchases when fluctuating rates impact mortgage payments at a rate of $100 or more each month.
Mr. Shader points out that inflation is impacting the home sales market as well. Overall, home prices are lower than they were last year, but they are still quite high when viewed from a historical perspective. Additionally, potential buyers are feeling financial pressures in other areas, and for many of them, it simply makes sense to delay purchasing a home until economic factors shift.
Finally, inflation could lead to home values tapering off. This factor could be turning off investors and other buyers. Some are concerned with losing money or being stuck in homes that have lost value.
Despite the changes in the market over the past 12 months, Andrew Shader strongly believes that there are opportunities for both buyers and sellers to get good results in this economic climate. He recommends researching carefully, working with skilled agents, and taking the time to make careful decisions rather than responding reactively.
About Andrew Shader
Andrew Shader is an entrepreneur, real estate investor, and developer. He is based in Florida and specializes in finding properties and increasing their values to create a profit. When he isn’t working, Mr. Shader is interested in playing sports and reading.
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