Sales of previously owned homes fell 1% in September from August, to a seasonally adjusted annual rate of 3.84 million units, the slowest pace since October 2010, according to the National Association of Realtors.
Sales were down 3.5% from September 2023. Sales declined in three out of four U.S. regions, with only the Western region seeing gains.
This number is based on closings, which represent contracts potentially signed in July and August. Mortgage rates started out in July near 7% over 30 years and then slowly dropped through August to just under 6.5%. Rates are now more than a full percentage point lower than they were a year ago.
“Home sales have essentially been stuck at about four million units over the past 12 months, but factors typically associated with higher home sales are evolving,” said Lawrence Yun, chief economist for the National Association of Realtors.
A “For Rent For Sale” sign appears outside a home in Washington, US, July 7, 2022.
Sarah Silbiger | Reuters
Inventory rose 1.5% month over month to 1.39 million homes for sale at the end of September. This represents a 4.3-month supply at the current sales pace. Inventory was 23% higher compared to September 2023.
“More inventory is definitely good news for homebuyers because it gives consumers more properties to view before making a decision,” Yoon said. “However, the inventory of distressed properties is minimal because the mortgage delinquency rate remains very low. Distressed property sales accounted for only 2% of all transactions in September.”
Low inventory pressure continues to push prices higher. The median price of an existing home sold in September was $404,500, an increase of 3% year over year and the 15th straight month of annual price gains.
Cash is still dominant in this market, as it represents 30% of September sales. Before the coronavirus outbreak, cash buyers made up about 20% of sales. Yun noted that investors are not just using cash, as investors actually fell slightly in September to just 16% of sales, down from 19% in August.
Homes are sitting longer, averaging 28 days compared to just 21 days last year. First-time buyers pulled back again, making up just 26% of September sales. This matches the lowest level on record since August.
