It is anticipated that existing home sales will fall to their lowest point since 2011 throughout 2023, as high rates restrain the release of homebuying demand.

However, the high rates have also constrained the housing supply in the market, as current homeowners are reluctant to sell and relocate, resulting in shortages that have driven up home prices in much of the United States.

According to data from the National Association of Realtors (NAR), existing home sales declined by 2% month-on-month in September, with the seasonally adjusted annual sales rate of 3.96 million units, the lowest level since October 2010. Sales in September decreased by 15.4% compared to the same period last year.

NAR indicated that the national median existing-home price in September rose by 2.8% year-on-year, reaching $394,300. Lawrence Yun, the Chief Economist at NAR, pointed out that this was the highest price for September since 1999.

It is worth noting that house prices have not been adjusted for inflation, implying that the actual increase in house prices could be even higher.

Lawrence Yun stated, "People are forced to lower their prices. Limited housing supply and continually rising mortgage rates continue to hinder the housing sales market."

The squeezing effect caused by high rates has put pressure on many homebuyers' affordability, making it difficult for first-time buyers to enter the market. Especially after the end of summer, housing activity typically slows down as families with children are reluctant to move during the academic year. Additionally, the cold weather and holidays in some parts of the United States have deterred many potential homebuyers.

The slowdown in the real estate market is a direct result of the Federal Reserve's decision to raise the benchmark interest rate to a 22-year high, aiming to curb inflation and cool down the economy.

However, minutes from the recently published meeting indicated a divergence among Federal Reserve officials on whether another rate hike is needed this year. The market widely expects that the continued rise in mortgage rates over the next few months, along with the sustained increase in home prices, will keep homebuyers' affordability at a relatively low level.

On the other hand, data from the Mortgage Bankers Association of the United States showed that mortgage applications plummeted to their lowest level since 1995 in the week ending October 13th. This data further confirms the impact of current high rates on homebuyer confidence, with many potential buyers facing the challenge of continuously rising purchasing costs.