September home sales fell to lowest level since 2010

Sales of previously owned homes fell 1% in September compared to August, according to the National Association of Realtors.

Sales were 3.5% lower than in September 2023. Sales fell in three of the four US regions, with only the West seeing a gain.

This figure is based on closings representing contracts signed in July and August. Mortgage rates on the 30-year fixed began near 7% in July and slowly fell below 6.5% through August. Rates are now less than a full percentage point lower than a year ago.

“Home sales have stalled on a four-million-unit basis over the past 12 months, but the factors associated with higher home sales are generally growing,” said Lawrence Yun, chief economist at the National Association of Realtors.

Prices rose 1.5% to 1.39 million homes sold at the end of September. This represents 4.3 months of supply at the current sales pace. Inventory was up 23% from September 2023.

“Higher inventory is definitely good news for homebuyers because it gives consumers more properties to look at before making a decision,” Yun said. “However, because mortgage delinquency rates are so low, the inventory of distressed properties is low. Distressed property sales accounted for only 2% of all transactions in September.”

Even lower inventory pressures continue to push prices higher. The median price of an existing home sold in September was $404,500, a 3% year-over-year increase and the 15th consecutive month of annual price gains.

Cash continues to be king in this market, accounting for 30% of September sales. Pre-Covid, cash buyers accounted for around 20% of sales. Yun noted that investors aren’t just using cash, as investors actually pulled back slightly in September, selling just 16%, compared to 19% in August.

Houses have been sitting for an average of 28 days longer compared to just 21 days a year ago. First-time buyers held back again, accounting for just 26% of September sales. This is the lowest level since August.