September home sales dropped more than 10 percent in two of the nation’s priciest housing markets, the San Francisco Bay Area and Southern California, according to new data from the real estate analysis firm CoreLogic.
“In fact, for the month of September, this was the weakest home sales report in about 11 years,” said CoreLogic’s chief economist, Frank Nothaft.
Fewer people buying homes might suggest less demand, but the firm found home prices continued to go up, even as sales slipped.
“Demand is actually increasing,” said Susan Wachter, real estate professor at the University of Pennsylvania. “Millennials still have not purchased their first home and they want to purchase their homes.”
The real cost of homebuying is even higher than prices suggest, because mortgage interest rates are also increasing.
“The housing market crunch is going to get worse,” Wachter said.