With rising mortgage rates, inflationary pressures, and an uncertain economy, the National Association of Realtors says, as of August, sales of previously owned homes fell for the seventh month in a row.
Insider Intelligence/eMarketer reports on other factors impacting home sales, including:
- Less home-for-sale listings. Zillow reports that new listings were down 23% from August 2021 to August 2022.
- Fewer buyers. Redfin says renters are staying put since rents hikes were up 11% year-over-year in August, which was the smallest annual increase in a year.
Insider Intelligence/eMarketer reports this “housing paralysis” is “having a ripple effect” on home goods sales. Consumers typically buy home décor, furniture, and appliances when they move into new homes. So, since they’re not moving and have less discretionary money to spend, they’re not making home-related purchases.
Another likely factor is that many consumers invested in home goods during the pandemic when they were home nearly 24.7, so they do not need to update their current homes. Insider Intelligence/eMarketer says 23% of consumers spent less on home décor and furniture, according to First Insight.
The CEO of RH, a national home furnishings company, told Insider Intelligence/eMarketer that it was “probably going to be a difficult 12 to 18 months in our industry.”
If you’re in this field, make sure your cash flow is in good shape, consider getting a business line of credit, just in case, and strategize how you can encourage customers to buy.
Home sales stock image by PeopleImages.com – Yuri A/Shutterstock