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Inventory, Median Existing-Home Sales Prices Up

Numbers for existing-home sales for September are in and the Existing-Home Sales Report—published by the National Association of Realtors (NAR)—found that home sales slid 2% in September to a seasonally adjusted annual rate of 3.96 million units. Year-over-year, this number is also down by 15.4%. 

However, the median existing-home sales price grew by 2.8% year-over-year to $394,300, marking the third consecutive month of year-over-year price increases. 

The inventory of unsold existing homes climbed 2.7% from the prior month to 1.13 million at the end of September, or the equivalent of 3.4 months' supply at the current monthly sales pace. This number is up from 3.3 months in August and 3.2 months in September 2022 

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – waned 2.0% from August to a seasonally adjusted annual rate of 3.96 million in September. Year-over-year, sales dropped 15.4% (down from 4.68 million in September 2022). 

"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." 

"For the third straight month, home prices are up from a year ago, confirming the pressing need for more housing supply," Yun said. 

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.57% as of October 12. That's up from 7.49% the previous week and 6.92% one year ago. 

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 four major regions of the U.S., the Midwest reported 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 trailed off 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." 

Danielle Hale, the Chief Economist for Realtor.com also commented on the report: 

“Sales of existing homes are expected to continue to hover right around a 4-million-unit pace in September. On a yearly basis, home sales declines are expected to be more modest, as we lap the sharp sales declines from one year ago,” Hale said. “Mortgage rates climbed relentlessly this summer, crossing the 7% threshold in August when many September sales would have gone under contract. Although affordability is a headwind, the renewed upward energy that followed the Fed’s September projections might have prompted some shoppers to rush to the closing table, lest they face higher mortgage rates and even worse affordability in the months ahead. If so, this could mean a bigger lull in sales activity in the coming months.” 

“The U.S. median existing-home sales price maintained resilience, despite affordability challenges, registering above year ago levels,” Hale continued. “Even though the market saw an unseasonal influx of newly listed homes in August, according to Realtor.com, September data showed that the improvement may have been short-lived. Furthermore, for-sale inventories still remain drastically below pre-pandemic levels. The lack of supply has supported home prices, even though buying a home takes up a greater share of income now. In fact, price reductions are rarer than they were one year ago, highlighting the fact that many sellers are aligned with buyer expectations.  

“Regionally, the market’s rebalancing continues to play a role in sales activity. As affordability draws buyers in, the Midwest and parts of the Northeast have seen inventories dwindle,” furthered Hale. “The largest metros in these regions comprised 18% and 20% of active home listings, respectively, in 2017-2019 and are now tracking closer to 15% and 17%. Meanwhile, more active home listings are found in major metros in the South, up from 45% to 49%, and the West up from 17% to 19%.” 

“Faced with daunting conditions, a number of households have pulled back from the for-sale market to rent instead. This is a factor behind the relative steadiness in rental prices, which have dipped less than 2% from their 2022 peak, according to Realtor.com data, despite record-high levels of multi-family construction,” Hale concluded. “Nevertheless, other households refuse to put their dreams on hold and are taking creative steps to navigate the challenge, including the 29% of prospective buyers who have moved in with parents to save money, according to a recent Realtor.com survey.” 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at [email protected].

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