As supply remains tight, existing-home sales sag in September
Existing-home sales dropped by 2% in September, the National Association of Realtors reported this morning.
This includes completed transactions of single-family homes, townhomes, condominiums, and co-ops.
Existing sales fell to a seasonally adjusted annual rate of 3.96 million in September. Year-over-year, sales dropped 15.4% and are down from 4.68 million in September 2022.
Yesterday, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported that housing starts grew by 7% to a seasonally adjusted annual rate of 1.358 million, compared to the revised August estimate of 1.269 million.
Despite mortgage rates hovering around 7% or better, the new home market moved forward largely due to the lack of existing homes on the market. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.57% as of October 12. The rate stood at 7.49% last week and 6.92% for the same period a year ago.
“As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” said NAR Chief Economist Lawrence Yun. “The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains.”
Single-family home sales declined to a seasonally adjusted annual rate of 3.53 million in September, down 1.9% from 3.6 million in August and 15.8% from the prior year. And prices continue to climb as the median existing single-family home price was $399,200 in September, up 2.5% from September 2022.
The median existing home price for all housing types in September was $394,300, an increase of 2.8% from September 2022 and a median price of $383,500).
Total housing inventory at the end of September was 1.13 million units, moving ahead 2.7% from August but down 8.1% from 1.23 million units for the same period a year ago. Current unsold inventory sits at a 3.4-month supply, inching upward from a 3.3-month supply in August and a 3.2-month supply in September 2022.
“For the third straight month, home prices are up from a year ago, confirming the pressing need for more housing supply,” Yun said.
The Realtors Confidence Index showed that properties remained on the market for just 21 days in September, up from 20 days in August and 19 days in September 2022. According to the Index, about 69% of homes sold in September were on the market for less than a month.
Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 430,000 units in September, down 2.3% from August and 12.2% from one year ago. The median existing condo price was $353,800 in September, up 6.8% from the prior year ($331,300).
Here’s how existing-home sales performed on a regional basis in September:
- Existing-home sales in the Northeast rose 4.2% from August to an annual rate of 500,000 in September, down 16.7% from September 2022. The median price in the Northeast was $439,900, up 5.2% from the prior year.
- In the Midwest, existing-home sales declined by 4.1% from the previous month to an annual rate of 930,000 in September, down 18.4% from one year ago. The median price in the Midwest was $293,300, up 4.7% from September 2022.
- Existing-home sales in the South dipped 1.1% from August to an annual rate of 1.82 million in September, a decrease of 11.7% from the previous year. The median price in the South was $360,500, up 3.1% from September 2022.
- In the West, existing-home sales diminished by 5.3% from the previous month to an annual rate of 710,000 in September, down 19.3% from one year ago. The median price in the West was $606,100, up 1.8% from September 2022.
“The Northeast posted the strongest price gain resulting from higher demand coupled with inventory falling by 20%,” Yun said. “The West experienced softer price growth reflecting a pause after years of unsustainable and rapid price increases, especially in the Rocky Mountain region.”
