Even as mortgage rates have eased, sales of previously owned homes in the United States fell last month to a near 14-year low as home prices went up.
According to the National Association of Realtors, contract closings on existing homes — which includes single-family homes, townhomes, condos and co-ops — decreased on a monthly basis by 1% in September to a seasonally adjusted annual rate of 3.84 million, marking the second consecutive monthly decline and slowest yearly sales pace since 2010.
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Meanwhile, existing home sales were down 3.5% from September 2023, dipping in the Northeast, South and Midwest, but increasing in the West. Median home prices also climbed 3% over the same time period from $392,700 to $404,500.
“Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months, but factors usually associated with higher home sales are developing,” NAR Chief Economist Lawrence Yun said in a statement. “There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy. Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”
According to the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, the average rate on a 30-year fixed mortgage was 6.44% as of October 17. While that's up from 6.32% the previous week, it is down from 7.63% a year prior.
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Additionally, the NAR said that the inventory of unsold existing homes rose 1.5% last month to 1.39 million. An inventory increase could put power in buyers' hands after a brutal 2023 when the NAR said inventory was so low that existing home sales were at their lowest point since 1995.
“More inventory is certainly good news for home buyers as it gives consumers more properties to view before making a decision,” Yun said.