Sales of previously owned homes fell 1% in September from August to a seasonally adjusted annualized sales volume of 3.84 million units, the lowest increase since October 2010, according to the National Association of Realtors.
Sales were down 3.5% from September 2023.
This count is based on volume and represents contracts likely to be signed in July and August. Rates on 30-year fixed-rate mortgages began July near 7%, then slowly fell to just under 6.5% throughout August. Interest rates are now a full percentage point lower than they were a year ago.
“Home sales have essentially been stuck around 4 million units over the past 12 months, but factors typically associated with increased home sales are developing,” said Lawrence Yun, chief economist for the National Association of Realtors.
On July 7, 2022, a “For Rent, For Sale” sign was hung outside a residence in Washington, USA.
Sarah Silbig | Reuters
The inventory of homes for sale at the end of September increased by 1.5% from the previous quarter to 1.39 million units. At current sales rates, this equates to a 4.3-month supply. Compared with September 2023, inventory increased by 23%.
“Increased inventory is certainly good news for homebuyers because it allows consumers to view more properties before making a decision,” Yun said. “However, as mortgage delinquency rates remain low, there is little inventory of distressed properties. Distressed property sales accounted for only 2% of all transactions in September.”
Pressure from still-low inventories continues to push prices higher. The median price of an existing home sold in September was $404,500, up 3% year over year, marking the 15th consecutive month of annual price gains.
Cash remains king in this market, accounting for 30% of sales in September. Before the COVID-19 pandemic, cash buyers accounted for about 20% of sales. Yun noted that it wasn’t just investors who used cash; investor sales actually fell slightly in September, to 16% from 19% in August.
Homes are vacant longer, averaging 28 days, compared with just 21 days a year ago. First-time homebuyers fell again, accounting for only 26% of September sales. That’s on par with an all-time low since August.
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