Existing home sales hit inflection point

Homebuyers were busy this summer: They closed on 6.29 million properties in September on a seasonally adjusted annualized rate, up 7% from August, according to the National Association of Realtors.

Why it matters: Lower mortgage rates made purchasing an attractive option, despite higher sales prices.

• Demand has pushed up the median sales price by 13.3% compared to a year ago.
• Yes, but: Lack of affordability kicked first-time homebuyers out — they made up 28% of sales, the lowest level in six years.

By the numbers: Though prices are up substantially from a year ago, September's median price of $352,800 showed a slight cooling compared to August.

• Inventory dropped 13% from last year.
• The average 30-year fixed rates fell below 3% in August.

What’s happening where: Buying activity was highest in the South, which grew 8.6% from August, and is flat compared to last year (all other regions declined year over year).

• Sales activity was highest for homes over $1 million (+30.5%) followed by the $750k-$1 million group (+26.6%), while sales fell for the lowest price ranges — homes under $100k-$250k (-22.7%) and under $100k (-21.2%).

The big picture: Existing-home sales slowed from last year, down 2.3%, but are still up 17.4% from the pre-pandemic period two years ago.

What we're watching: Over the next six months, sales may trend down as mortgage rates rise, and with inventory near record lows and home buying sentiment at 39-year lows, Matthew Pointon, senior property economist at Capital Economics, wrote in a research note.