Existing home sales fell to a 10-year low in September

Existing homes are selling at the slowest pace since September 2012, except for a brief decline at the start of the Covid 19 pandemic.

Sales of previously owned homes fell 1.5% in September from August to a seasonally adjusted annual rate of 4.71 million units, according to a monthly survey by the National Association of Realtors.

This marks the eighth consecutive month of declining sales. Sales are down 23.8% year over year.

Mortgage rates are sharply higher Cause a sudden slowdown in the housing market. The average 30-year fixed-rate home loan rate is now just over 7%, having started this year at around 3%. This makes the already expensive housing market even less expensive.

Despite the slowdown in sales, inventory continues to decline. There were 1.25 million homes for sale at the end of September, down 0.8% compared to September 2021. At the current sales pace, this is 3.2 months of supply. Six months is a balanced offer.

“Despite weak sales, there are still multiple offers with more than a quarter of homes selling above list price due to limited inventory,” said Lawrence Yun, chief economist at NAR. “The current shortfall in supply underscores the stark contrast to the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”

The lack of supply continues to put pressure on home prices. The median price for an existing home sold in September was $384,800, an increase of 8.4% in September 2021. Prices are up at all price points. This makes 127 consecutive months of annual increases.

Prices are getting cold. September marks the third consecutive month-to-month price drop, which usually falls at this time this year.

However, they are falling more difficult this year, especially at the lower end of the market, where stocks are much smaller. Prices for homes between $100,000 and $250,000 are down 28.4 percent from a year ago, while sales of homes between $750,000 and $1 million are down 9.5 percent.

Homes on the market stayed slightly longer in September, averaging 19 days, up from 16 days in August and 17 days in September 2021.

High mortgage rates don’t just scare away potential buyers. They keep sellers on the sidelines as well, adding to the inventory crunch.

“Homeowners love the 3% mortgage rate, and they don’t want to give up on that,” Yoon said.