In September, existing home sales in the United States unexpectedly fell, despite indications that typically correlate with increased sales. Data released by the National Association of Realtors showed a sequential drop of 1%, marking a seasonally adjusted annual rate of 3.84 million units for the month.
This decline was contrary to analysts' expectations, which anticipated a modest rise of 0.5%, according to a survey by Bloomberg. On an annual basis, existing home sales decreased by 3.5%. NAR Chief Economist Lawrence Yun remarked, 'Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months, but factors usually associated with higher home sales are developing.' He pointed out the growing inventory choices for buyers, lower mortgage rates compared to the previous year, and continued job additions enhancing the economic landscape.
In the single-family segment, sales reached a seasonally adjusted annual rate of 3.47 million in September, experiencing a 0.6% decrease sequentially and a 2.3% decline year on year. Meanwhile, condominium and co-op sales noted a steeper drop, decreasing 5.1% month over month and 14% from the previous year to 370,000 units.
The housing inventory stood at 1.39 million units at the end of September, reflecting a 1.5% sequential increase and a significant 23% rise on a year-over-year basis. Current sales rates indicate that the unsold inventory represents a 4.3-month supply, a slight uptick from 4.2 months in August and a more substantial rise from 3.4 months one year ago.
As of October 17, the average rate for a 30-year fixed mortgage climbed to 6.44%, up from 6.32% a week earlier but down significantly from 7.63% a year earlier, as reported by Freddie Mac. Existing home sales saw declines across the Northeast, Midwest, and South regions in September; however, the West experienced growth.
The median price for existing homes across all categories rose by 3% year over year, reaching $404,500. 'Our baseline assumes that a modest recovery in home sales gets underway in the fourth quarter and gains traction in 2025, although the recent rebound in mortgage rates alongside hurricanes Helene and Milton could delay that recovery,' noted Nancy Vanden Houten, a Senior Economist at Oxford Economics, in a statement sent to MT Newswires.
In related news, government statistics indicated that housing starts in the US decreased in September, primarily due to a drop in multi-family projects that outweighed the growth in single-family project initiatives..