U.S. Home Sales Dip Again in September, Lowest in 3 Years
According to the National Association of Realtors, U.S. existing-home sales declined in September 2018 after a flat month in August 2018. All four major regions saw no gain in sales activity last month.
Total existing-home sales fell 3.4 percent from August 2018 to a seasonally adjusted rate of 5.15 million in September. Sales are now down 4.1 percent from a year ago (5.37 million in September 2017).
NAR chief economist Lawrence Yun, says rising interest rates have led to a decline in sales across all regions of the country. "This is the lowest existing home sales level since November 2015," he said. "A decade's high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country."
Total housing inventory at the end of September decreased from 1.91 million in August to 1.88 million existing homes available for sale, and is up from 1.86 million a year ago. Unsold inventory is at a 4.4-month supply at the current sales pace, up from 4.3 last month and 4.2 months a year ago.
Properties typically stayed on the market for 32 days in September, up from 29 days in August but down from 34 days a year ago. Forty-seven percent of homes sold in September were on the market for less than a month.
The median existing-home price for all housing types in September was $258,100, up 4.2 percent from September 2017 ($247,600). September's price increase marks the 79th straight month of year-over-year gains.
"There is a clear shift in the market with another month of rising inventory on a year over year basis, though seasonal factors are leading to a third straight month of declining inventory," said Yun. "Homes will take a bit longer to sell compared to the super heated fast pace seen earlier this year".
The Realtor.com monthly Market Hotness Index also revealed that the hottest metro areas in September 2018 were Midland, Texas; Fort Wayne, Ind.; Odessa, Texas; Boston-Cambridge-Newton, Mass.; and Columbus, Ohio.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 4.63 percent in September from 4.55 percent in August. The average commitment rate for all of 2017 was 3.99 percent.
Yun further commented, "Rising interests rates coupled with increasing home prices are keeping first-time buyers out of the market, but consistent job gains could allow more Americans to enter the market with a steady and measurable rise in inventory".
First-time buyers were responsible for 32 percent of sales in September, up from last month (31 percent) and a year ago (29 percent). NAR's 2017 Profile of Home Buyers and Sellers - released in late 2017- revealed that the annual share of first-time buyers was 34 percent.
All-cash sales accounted for 21 percent of transactions in September, up from July and a year ago (both 20 percent). Individual investors, who account for many cash sales, purchased 13 percent of homes in August, unchanged from July and down from 15 percent a year ago.
Distressed sales - foreclosures and short sales - were 3 percent of sales in September (the lowest since NAR began tracking in October 2008), unchanged from last month and down from 4 percent a year ago. Two percent of September sales were foreclosures and 1 percent were short sales.
Orlando veteran real estate broker Tonya Giddens tells The World Property Journal, "Home affordability, rising mortgage rates and lack of available inventory are causing a real problem in many U.S. housing markets in 2018."
Single-family and Condo/Co-op Sales
Single-family home sales were at a seasonally adjusted annual rate of 4.58 million in September, down from 4.74 million in August, and are 4.0 percent below the 4.77 million sales pace from a year ago. The median existing single-family home price was $260,500 in September, up 4.6 percent from September 2017.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 570,000 units in September, down 3.4 percent from last month and 5.0 percent from a year ago. The median existing condo price was $239,200 in September, which is up 1.5 percent from a year ago.
Regional U.S. Housing Breakdown
September existing-home sales in the Northeast decreased 2.9 percent to an annual rate of 680,000, 5.6 percent below a year ago. The median price in the Northeast was $286,200, which is up 4.1 percent from September 2017.
In the Midwest, existing-home sales remained the same as last month at an annual rate of 1.28 million in September, but are still down 1.5 percent from a year ago. The median price in the Midwest was $200,200, up 1.9 percent from last year.
Existing-home sales in the South decreased 5.4 percent to an annual rate of 2.11 million in September, down from 2.12 million a year ago. The median price in the South was $223,900, up 3.0 percent from a year ago.
Existing-home sales in the West fell 3.6 percent to an annual rate of 1.08 million in September, 12.2 percent below a year ago. The median price in the West was $388,500, up 4.1 percent from September 2017.