Existing home sales — that is, sales of used homes, not new construction — have trended lower all year. And with mortgage rates and prices remaining high, homebuyers are unlikely to be in a rush to make that purchase. A new report from the National Association of Realtors (NAR) indicates that more buyers are taking a wait-and-see approach in today’s market.
Existing home sales fall for 8th consecutive month
Existing home sales include all sales of non-new homes, including single family homes, condominiums, townhouses and co-ops. According to NAR figures released in late October, sales of existing homes in the United States fell in September 2022 for the eighth consecutive month. The 1.5% decline from August equates to a 23.8% year-over-year decline since September 2021.
The South has seen the largest monthly decline in existing home sales, with a 1.9% drop since August and a 23.8% year-on-year decline. Sales in the Midwest fell 1.7% for the month and 19.7% for the year, and the Northeast saw a decline of 1.6% for the month and 18.7% for the year. the year. By contrast, existing home sales in the West region have been flat since August, but saw a whopping 31.3% year-over-year decline.
NAR Chief Economist Lawrence Yun attributes the drop in sales to high interest rates in the current market.
“The housing sector continues to undergo an adjustment due to the continued rise in interest rates, which exceeded 6% for 30-year fixed mortgages in September and are now approaching 7%,” Yun said in a statement. . “Expensive parts of the country are particularly feeling the pinch and are seeing bigger sales declines.”
Median selling prices continue to rise
Despite the decline in existing home sales and rising interest rates, median selling prices continue to climb. The national median sale price for existing homes is now $384,800, up 8.4% from a year ago. September 2022 was the 127th consecutive month of year-over-year median selling price increases – the longest streak since NAR began keeping records.
Regionally, house prices increased year over year in the four regions tracked by NAR. The West has the highest median price at $595,400, a 7.1% increase since September 2021. In the Northeast, the median rose 8.3% to $418,500, and in the South , it rose 11.8% to $351,700. The Midwest had the lowest median sale price in September at $281,500, still representing a 6.9% increase from a year ago.
A still scarce housing stock
Total housing inventory – the number of homes on the market for sale – stood at 1.25 million units at the end of September, down 2.3% from August and down 0.8% from August. one year to the next. This represents a supply of approximately 3.2 months at the current rate of sale, up from 2.4 months in September 2021, but still well below the amount needed for a balanced market, generally estimated at 5 to 6 months. .
“Despite weaker sales, several offers are still in place, with more than a quarter of homes selling above list price due to limited inventory,” Yun said. “The current lack of supply underscores the vast contrast to the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”