Sales of previously owned homes fell 1% in September compared with August, to a seasonally adjusted, annualized rate of 3.84 million units, the slowest pace since October 2010, according to the National Association of Realtors.
Sales were 3.5% lower than in September 2023. Sales fell in three out of four U.S. regions, with just the West region seeing a gain.
This count is based on closings, representing contracts signed likely in July and August. Mortgage rates started July close to 7% on the 30-year fixed and then fell slowly through August to just below 6.5%. Rates are now more than a full percentage point lower than they were a year ago.
“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 Lawrence Yun, chief economist for the National Association of Realtors.
A “For Rent, For Sale” sign is seen outside of a home in Washington, U.S., July 7, 2022.
Sarah Silbiger | Reuters
Inventory rose 1.5% month to month to 1.39 million homes for sale at the end of September. That represents a 4.3-month supply at the current sales pace. Inventory was 23% higher from September 2023.
“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.”
The pressure of still low inventory 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 consecutive month of annual price gains.
Cash continues to be king in this market, making up 30% of September sales. Pre-Covid, cash buyers made up about 20% of sales. Yun noted that it is not just investors using cash, as investors actually pulled back slightly in September to just 16% of sales, down from 19% in August.
Homes are sitting longer, an average of 28 days compared with just 21 days a year ago. First-time buyers pulled back again, making up just 26% of September sales. That matches the all-time low from August.