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.