Existing home sales in September fell to lowest level since October 2010 as limited inventory and higher mortgage rates continued to weigh on homebuyers, according to the National Association of Realtors (NAR). Low resale inventory and strong demand continued to drive up existing home prices, marking the third consecutive month of year-over-year median sales price increase. A resurgence of mortgage rates is likely to contribute a further decline in existing home sales in the months ahead.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 2.0% to a seasonally adjusted annual rate of 3.96 million in September. On a year-over-year basis, sales were 15.4% lower than a year ago.
The first-time buyer share fell to 27% in September, down from 29% in August 2023 and September 2022. The September inventory level measure increased slightly to 1.13 million units but was down 8.1% from a year ago.
At the current sales rate, September unsold inventory sits at a 3.4-months’ supply, up from 3.3-months last month and 3.2-months reading a year ago. This inventory level remains very low, compared to balanced market conditions (4.5 to 6 months’ supply), and illustrates the long-run need for more home construction.
Homes stayed on the market for an average of 21 days in September, up from 20 days in August and 19 days in September 2022. In September, 69% of homes sold were on the market for less than a month.
The September all-cash sales share was 29% of transactions, up from 27% in August but and 22% a year ago. All-cash buyers are less affected by changes in interest rates.
The September median sales price of all existing homes was $394,300, up 2.8% from a year ago. The median existing condominium/co-op price of $353,800 in September, up 6.8% from a year ago.
Existing home sales in September were mixed across the four major regions. Sales in the South, West and Midwest decreased 1.1%, 5.3% and 4.1% in September, while sales in the Northeast rose 4.2%. On a year-over-year basis, all four regions continued to see a double-digit decline in sales, ranging from 11.7% in the South to 19.3% in the West.
The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell 7.1% from 77.3 to 71.8 in August. On a year-over-year basis, pending sales were 18.7% lower than a year ago per the NAR data.