U.S. existing home sales slowed to their slowest annual pace in nearly 14 years in September, even as mortgage rates eased and the supply of real estate on the market continued to increase.
Existing home sales fell 1% last month from August to a seasonally adjusted annual rate of 3.84 million units, the National Association of Realtors said Wednesday. This is the slowest annual sales pace since October 2010, when the housing market was still in deep recession following the real estate crash of the late 2000s.
Sales decreased by 3.5% compared to September last year. The latest number of home sales fell short of the 3.9 million pace economists had expected, according to FactSet.
Despite the slowdown in sales, home prices rose for the 15th consecutive month on an annual basis. The national median sales price increased 3% from the previous year to $404,500.
“While home sales have essentially been stuck at around 4 million units for the past 12 months, the factors typically associated with increased home sales are evolving,” said NAR Chief Economist Lawrence Yun. said.
As sales slow, the inventory of homes for sale continues to grow. According to NAR, there were 1.39 million unsold homes as of the end of September, an increase of 1.5% from August last year and a 23% increase from September.
This is equivalent to 4.3 months of supply at the current sales pace, an increase from 3.4 months at the end of September last year. Traditionally, a five to six month supply is considered a balanced market between buyers and sellers.
The US housing market is amidst sluggish sales Fast forward to 2022, when mortgage rates began rising from their pandemic-era lows. Existing home sales fell to a nearly 30-year low last year as average interest rates on 30-year mortgages rose to nearly 8%, a 23-year high, according to mortgage buyer Freddie Mac.
Mortgage interest rates have been mostly eased since July, Lowest average in the last 2 years — 6.08% — 4 weeks ago, and has been slowly increasing since then. The average rates were: at 6.44% last week.
