Existing home sales fell again in September, as many buyers stayed on the sidelines even though mortgage rates eased slightly during the month.
According to the National Association of Realtors (NAR), sales dropped 1% from August, reaching a seasonally adjusted annual rate of 3.84 million. This marks the lowest level since October 2010, falling short of economists’ predictions of 3.88 million. On a year-over-year basis, home sales fall by 3.5%.
Despite fewer transactions, the median home price rose 3% compared to last year, hitting $404,500. This is the 15th consecutive month of year-over-year price increases, further complicating the market for potential buyers.
Several factors continue to hold buyers back. Although the Federal Reserve cut its benchmark rate by half a percentage point in September, high home prices and elevated mortgage rates remain major barriers. While the Fed doesn’t set mortgage rates directly, its decisions do affect them. In fact, mortgage rates dropped to their lowest since February 2023 ahead of the Fed’s move. However, this hasn’t been enough to entice many buyers to act.
Inventory levels have also picked up, but economic uncertainty and the upcoming election may be causing consumers to delay major decisions, like purchasing a home.
First-time homebuyers are facing particular challenges. In September, they made up just 26% of the market, an all-time low since August and November 2021, according to NAR data. With these conditions in mind, experts predict that home sales fall even further this year, potentially dipping below last year’s levels.
Thanks for reading,
Chris
