Existing home sales in the US fell by 1% in September from the previous month to a seasonally adjusted annual rate of 3.84 million units, according to a new report from the National Association of REALTORS® (NAR).
Existing home sales in September were 3.5% lower compared to the same month last year and reached a 14-year low.
Sales fell in all regions of the US except the West.
NAR Chief Economist Lawrence Yun said that while home sales have been at around the 4 million unit pace for the past year, “factors usually associated with higher home sales are developing.”
The average 30-year fixed mortgage rate is 1% lower than last year, and the September sales figure largely represents contracts signed in the preceding months. It’s important to consider that rates were higher when many of these contracts were signed.
“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,” Yun noted.
What happened to prices and inventory?
While sales fell, that didn’t stop the median price of existing homes from ticking up, reaching $404,500 — 3% higher than in September last year. Median prices have been increasing for 15 months straight (on a year-over-year basis).
Inventory increased by 1.5% in September compared to the previous month, reaching 1.39 million — 23% higher than in September last year.
“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.”