U.S. existing home sales declined by 2.0% in September, revealing ongoing housing challenges

WASHINGTON – The National Association of Realtors® reports a 2.0% decline in existing home sales for the month of September, indicating persistent challenges in the housing market. These challenges are attributed to limited inventory and ongoing issues with housing affordability.

The total number of existing-home sales, which include single-family homes, townhomes, condominiums, and co-ops, fell to a seasonally adjusted annual rate of 3.96 million in September, a decrease of 15.4% compared to the same period last year when it stood at 4.68 million.

NAR Chief Economist Lawrence Yun pointed out, “As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales. The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains.”

The housing inventory at the end of September stood at 1.13 million units, marking a 2.7% increase from August. However, this inventory is down 8.1% from one year ago. Unsold inventory currently represents a 3.4-month supply at the current sales pace, which is slightly up from 3.3 months in August and 3.2 months in September 2022.

The median existing home price for all housing types in September was $394,300, a 2.8% increase from the same month in 2022 when it was $383,500. This marks the third consecutive month of year-over-year price increases.

Yun emphasized, "For the third straight month, home prices are up from a year ago, confirming the pressing need for more housing supply."

The REALTORS® Confidence Index also revealed that properties typically remained on the market for 21 days in September, up from 20 days in August and 19 days in September 2022. Of the homes sold in September, 69% were on the market for less than a month.

First-time buyers accounted for 27% of sales in September, a decrease from 29% in August 2023 and September 2022. This is in line with NAR's 2022 Profile of Home Buyers and Sellers, which found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.

All-cash sales represented 29% of transactions in September, up from 27% in August and 22% in September 2022. Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in September, up from 16% in August and 15% one year ago.

Distressed sales, including foreclosures and short sales, remained unchanged at 1% of sales in September.

Mortgage rates also saw an increase, with the 30-year fixed-rate mortgage averaging 7.57% as of October 12, up from 7.49% the previous week and 6.92% one year ago.

In terms of specific property types, single-family home sales dipped to a seasonally adjusted annual rate of 3.53 million in September, down 1.9% from August and 15.8% from the previous year. The median price for existing single-family homes was $399,200 in September, a 2.5% increase from September 2022.

Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 430,000 units in September, down 2.3% from August and 12.2% from one year ago. The median existing condo price was $353,800 in September, up 6.8% from the prior year.

The September data highlights the continued complexity of the housing market, with inventory constraints and affordability issues posing significant challenges for buyers and sellers.

Regional variations

In the housing markets across the United States, regional variations have marked the recent trends, offering a snapshot of the diverse conditions that continue to shape the real estate landscape.

Northeast:

Existing home sales increased by 4.2% from August but were down 16.7% from the previous year. The median price in the Northeast was $439,900, up 5.2% from the previous year.

Midwest:

Existing home sales in the Midwest declined by 4.1% from the previous month, down 18.4% from one year ago. The median price in the Midwest was $293,300, up 4.7% from September 2022.

South:

Existing home sales in the South dipped 1.1% from August and decreased by 11.7% from the previous year. The median price in the South was $360,500, up 3.1% from September 2022.

West:

Existing home sales in the West declined by 5.3% from the previous month and were down 19.3% from the previous year. The median price in the West was $606,100, up 1.8% from September 2022.