Existing-home sales slip again in September
Continuing a trend from August, existing-home sales slipped in September by 1.0%, according to the National Association of Realtors® (NAR). Three out of the four regions saw a slide month-over-month. Existing-home sales also were down from a year ago by 3.5% and came in at a seasonally-adjusted annual rate of 3.84 million for September.
The West region, traditionally the most expensive region in terms of home prices, surprised with a big bounce. It had been down month-over-month last month, but was the only positive in September.
- Northeast: down 4.2%, an annual rate of 460,000, down 6.1% from September 2023
- Midwest: down 2.2%, an annual rate of 900,000, down 5.3% from September 2023
- South: down 1.7%, an annual rate of 1,720,000, down 5.5% from September 2023
- West: up 2.7% an annual rate of 730,000, down 6.0% from September 2023
Reasons for optimism
“Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months, but factors usually associated with higher home sales are developing,” said NAR Chief Economist Lawrence Yun. “There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy. Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”
The number of homes for sale, known as unsold inventory, rose again in September. Unsold inventory sits at a 4.3-month supply at the current sales pace. This is up from 4.2 months in August and from 3.4 months last year. There were 1.39 million unsold homes on the market in September. That’s good news for first-time homebuyers who now have more options.
“More inventory is certainly good news for home buyers as it gives consumers more properties to view before making a decision,” Yun 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.
Home prices are also down from August, dropping 2.9% month-over-month. September home prices are down significantly (5.2%) from the all-time high median existing-home price reached this June. Year-over-year, prices are up 3.0%, the lowest year-over-year increase in the last 12 months.
“Moderating home price increases are welcome news for home buyers,” Yun added. “With wage growth now outpacing home price appreciation, housing affordability will improve.”
Month | Median existing-home price | Month-over-month | Year-over-year |
$407,100 | Up 0.1% | Up 3.9% | |
$394,300 | Down 3.1% | Up 2.8% | |
$391,800 | Down 0.6% | Up 3.4% | |
$387,600 | Down 1.1% | Up 4.0% | |
$382,600 | Down 1.3% | Up 4.4% | |
$379,100 | Down 0.9% | Up 5.1% | |
$384,500 | Up 1.4% | Up 5.7% | |
$393,500 | Up 2.3% | Up 4.8% | |
$407,600 | Up 3.6% | Up 5.7% | |
$419,300 | Up 2.9% | Up 5.8% | |
$426,900 | Up 1.8% | Up 4.1% | |
$422,600 | Down 1.0% | Up 4.3% | |
$416,700 | Down 1.4% | Up 3.1% | |
September | $404,500 | Down 2.9% | Up 3.0% |
How September sales shook out
First-time homebuyers were responsible for 26% of sales in September - the same as August - and matches the all-time low that was reached in November of 2021. 30% of transactions were all-cash sales in September, up from 26% in August and 29% in September 2023. Individual investors or second-home buyers purchased 16% of homes in September, down from 19% in August.
Today’s inventory news is a continuation of a welcome trend and seems to be helping to cool home prices. Mortgage rates have been moving up over the past weeks, which could make it a difficult market. That’s why it’s so important to work with an experienced loan officer.
Source: https://www.nar.realtor/newsroom/existing-home-sales-dipped-2-5-in-august
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