The growth of existing home sales fell to its lowest level in September, declining 4.1 percent from a year ago, according to the National Association of Realtors' (NAR's) Existing-home Sales Report released on Friday.
On a month-over-month basis, sales declined 3.4 percent from August to a seasonally adjusted rate of 5.15 million homes, NAR reported.
While sales fell, the report indicated that median home prices during the month rose 4.2 percent to $258,100 compared with $247,600 in September 2017.
Attributing the decline in sales to rising interest rates, Lawrence Yun, Chief Economist at NAR said that this was the lowest existing home sales level since November 2015. “A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country,” he said.
Joseph Kirchner, Senior Economist for Realtor.com said that apart from weak pending home sales some of the effects of the damage from the recent Hurricane Florence was felt on existing-home sales too. “The majority of the decline was in the South with some declines in the North and West, while the Midwest remained steady,” Kirchner said. “While we’ve seen a 49-year low in unemployment and robust job growth over the last 12 months, existing home sales have struggled.”
The NAR report also indicated a rise in housing inventory from a year ago, but a decline month over month. In September, housing inventory stood at 1.88 million, decreasing from 1.91 million in August, but increasing from 1.86 million during the same period a year ago.
“There is a clear shift in the market with another month of rising inventory on a year over year basis, though seasonal factors are leading to a third straight month of declining inventory,” Yun said. “Homes will take a bit longer to sell compared to the super-heated fast pace seen earlier this year.”
Looking ahead at the housing market, Kirchner said that one potential tailwind could help shift the balance in favor of the housing market. “For the last few years, shoppers have struggled with low inventory and fast-rising prices,” he said. “There are signs that the tide could be changing in favor of buyers with more new listings coming up for sale, causing overall inventory to pick-up in some markets and listing price cuts to become more common. While it’s not yet a buyer’s market in most areas of the country, these changing conditions mean that sellers may need to be mindful of their competition, as buyers have been for years.”
To read the detailed NAR report click here.