Existing-home sales dropped 1.5% monthly in September, declining to a seasonally adjusted annual rate of 4.71 million units, according to the National Association of Realtors (NAR).
September marked the eighth consecutive monthly decrease in sales, the longest such streak since 2007, when the market was in the throes of the subprime mortgage crisis. The ongoing drop brought sales to their lowest level since September 2012, barring a short period in May 2020 during the lockdowns at the beginning of the COVID-19 pandemic. Year over year, sales fell 23.8%.
“The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6% for 30-year fixed mortgages in September and are now approaching 7%,” said Lawrence Yun, the NAR’s chief economist. “Expensive regions of the country are especially feeling the pinch and seeing larger declines in sales.”
Still, even with sales clearly slowing, prices continue to rise. The median existing-home price in September was $384,800, up 8.4% year over year. September was the 127th straight month with an annual increase in home prices, the longest streak of year-over-year price gains ever. It was, however, the third month in a row that the median sales price has declined after it peaked at a record-high $413,800 in June. Some of that is due to seasonality, with prices usually reaching an apex in early summer before waning.
Low inventory is keeping prices elevated, Yun noted.
“Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” he said. “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”
Total housing inventory was at 1.25 million units at the end of September, down 2.3% from August and 0.8% from September 2021. At the current sales pace, unsold inventory is at a 3.2-month supply, up from 2.4 months last year but flat from August. Inventory recovery has been slow despite weak sales because so many current homeowners have low mortgage rates from the past cycle, leaving few willing to buy at a higher rate and put their present homes up for sale.