A recent report by the National Association of Realtors (NAR), released on Wednesday, revealed an unexpected continued decline in U.S. existing home sales for the month of September. According to NAR, existing home sales decreased by 1.0% to an annual rate of 3.84 million, following a 2.0% drop in August, where the revised rate was 3.88 million.
Contrary to economist forecasts, which anticipated a 1.0% increase, raising the rate to 3.90 million from the initially reported 3.86 million for the previous month, the sales figures did not improve as projected.
NAR's Chief Economist Lawrence Yun commented, "Home sales have essentially hovered around the four-million-unit mark over the past year. Yet, we are witnessing developments in factors typically associated with a boost in home sales." He highlighted the increase in inventory options for consumers, mortgage rates that are lower than those a year ago, and persistent job growth in the economy. Yun speculated that some potential buyers might be reluctant to commit to a major purchase such as a home with the impending election.
The report further detailed that housing inventory reached 1.39 million units by the end of September, a 1.5% rise from August’s 1.37 million and a significant 23.0% ascent from 1.13 million units a year prior. The volume of unsold inventory accounts for a 4.3-month supply at the current sales pace, a slight increase from 4.2 months in August and 3.4 months in September 2023.
Yun remarked that the growth in inventory is beneficial for home buyers, offering a greater selection of properties to consider. However, he noted that the availability of distress properties remains limited due to a consistently low mortgage delinquency rate.
Additionally, NAR reported the median existing home price stood at $404,500 in September, reflecting a 2.3% decline from August’s $414,200, although representing a 3.0% increase compared to $392,700 from the previous year.
Looking ahead, the U.S. Commerce Department is set to release data on new home sales for September on Thursday. Economists predict a rise in new home sales to an annual rate of 720,000, following a drop to a rate of 716,000 in August.
