U.S. existing home sales fell to a 14-year low in September, weighed down by higher mortgage rates and house prices. According to the National Association of REALTORS, three out of four major U.S. regions registered sales declines while the West experienced a sales bounce. Year-over-year, sales also fell in three regions but grew in the West.
Total U.S. existing home sales declined 1 percent from August to a seasonally adjusted annual rate of 3.84 million in September. Year-over-year, sales fell 3.5 percent (down from 3.98 million in September 2023).
“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.
Housing inventory
Total housing inventory registered at the end of September was 1.39 million units, up 1.5 percent from August and 23 percent from one year ago. Unsold inventory sits at a 4.3-month supply at the current sales pace, up from 4.2 months in August and 3.4 months in September 2023.
“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,” added Yun.
The median U.S. existing-home price for all housing types in September was $404,500, up 3 percent from one year ago. All four U.S. regions registered price increases.
“Moderating home price increases are welcome news for home buyers. With wage growth now outpacing home price appreciation, housing affordability will improve,” Yun added.
Read: U.S. home prices rise slightly in July 2024 amid slowing momentum, improving supply conditions
All-cash sales account for 30 percent of transactions
First-time buyers were responsible for 26 percent of sales in September, matching the all-time low from August 2024 and November 2024, and down from 27 percent in September 2023. All-cash sales accounted for 30 percent of transactions in September, up from 26 percent in August and 29 percent in September 2023.
Individual investors or second-home buyers, who make up many cash sales, purchased 16 percent of homes in September, down from 19 percent in August and 18 percent in September 2023. Distressed sales, foreclosures and short sales, represented 2 percent of sales in September, virtually unchanged from last month and the previous year.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.44 percent as of October 17. That’s up from 6.32 percent one week ago but down from 7.63 percent one year ago.
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