A report released this morning by the National Association of Realtors showed that total existing home sales in America fell by 3.4 percent in September to a seasonally adjusted annual rate of 5.150 million units. That was the 6th monthly decline in a row, worse than expected, and the slowest sales pace recorded since 2015. Regionally, existing home sales is September fell in the South (-5.4 percent), the West (-3.6 percent), and the Northeast (-2.9 percent). Affordability remained a major headwind for the housing market last month, as the median selling price for existing homes ended September at $258,100. That was a 4.2 percent increase from September 2017 and therefore the 79th consecutive month of annual growth.
A lack of inventory has been a big factor behind the continued uptrend in home prices, but additional sellers (supply) may start to show up due to favorable conditions. For example, homes stayed on the market for an average of just 32 days in September, and 47 percent of all the properties that sold were listed for less than a month. Both of those figures are improvements compared to this same period last year even as home prices have continued to appreciate. The sudden jump in mortgage rates may be helping accelerate sales, as reluctant buyers realize that they are running out of time to take advantage of historically low borrowing costs. However, first-time homebuyers with insufficient cash (typically Millennials) are still struggling in the current environment. NAR’s chief economist Lawrence Yun, though, believes that “consistent job gains could allow more Americans to enter the market with a steady and measurable rise in inventory.”
Sources: Econoday, NAR, ZH, FRBSL
Post author: Charles Couch