Existing Home Sales Fall for 8th Straight Month

The pace of existing home sales continued its decline for the eighth straight month in September, the National Association of Realtors said Wednesday.

Sales for previously owned homes fell 1.5 percent to a seasonally adjusted annual rate of 4.71 million. That was slightly above the consensus forecast for 6.95 million.

Compared with a year ago, sales are down a staggering 23.8 percent. Sales have not been this low since May of 2020, when the early Wuhan coronavirus lockdowns had shut out buyers and sellers.

High interest rates are making homes unaffordable for many would-be buyers. What’s more, some owners are reluctant to put their homes on the market since they would be trading into a pricier mortgage on their next home.

“The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6 percent for 30-year fixed mortgages in September and are now approaching 7 percent,” said NAR Chief Economist Lawrence Yun. “Expensive regions of the country are especially feeling the pinch and seeing larger declines in sales.”

The number of homes on the market declined 2.3 percent to 1.25 million units in September. The real estate sector looks at supply in terms of how many months it would take to sell all available homes at the current pace of sales. A six-month supply is considered a balanced market. In September, there was a 3.2-month supply, the same as August, indicating a very tight housing market.

Homes remained on the market for 19 days on average, an increase from 16 days in August. Prior to the pandemic-induced housing boom, the average time for homes to remain on the market was a month.

“Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” Yun added. “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”

The median existing-home price for all housing types in September was $384,800, an 8.4 percent increase from a year ago. Prices were higher than a year ago in all regions. This marks 127 consecutive months of year-over-year increases, the longest-running streak on record, according to the NAR.

It was the third month in a row, however, that the median sales price fell after reaching a record high of $413,800 in June. The NAR said this reflects “the usual seasonal trend of prices trailing off after peaking in the early summer.” The NAR said it expects prices to keep falling through January and February.