CUNA Mutual Group issued the following announcement on Oct. 22.
WASHINGTON – Existing-home sales declined in September after a month of what the National Association of Realtors called “stagnation” in August. All four major regions of the U.S. saw no gain in sales activity last month, the NAR said.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.4% from August to a seasonally adjusted rate of 5.15 million in September. Sales are now down 4.1% from a year ago (5.37 million in September 2017), the Realtors group said.
According to the NAR’s chief economist, Lawrence Yun, rising 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,” Yun said. “All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”
NAFCU’s chief economist, Yun Cohen, added, “According to Redfin, the share of homes with price drops reached a record-high in September. Meanwhile, inventory is on the rise in many areas, another indication that the market is starting to tilt in homebuyers' favor. Nevertheless, demand is waning due to affordability constraints. NAR reported that foot traffic has slowed in some markets. Mortgage rates are rising and home price appreciation continues to outpace wage growth. In addition, slowing rental price increases of late could impact demand for homeownership. Recent hurricanes further dampen the short-term sales outlook.”
Other Data Points
Among other data points in the most recent NAR report:
The median existing-home price for all housing types in September was $258,100, up 4.2% from September 2017 ($247,600). September’s price increase marks the 79th straight month of year-over-year gains.
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.
“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.”
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 4.63% in September from 4.55% in August. The average commitment rate for all of 2017 was 3.99%.
First-time buyers were responsible for 32% of sales in September, the NAR said.
In looking at the country by region:
September existing-home sales in the Northeast decreased 2.9% to an annual rate of 680,000, 5.6% below a year ago. The median price in the Northeast was $286,200, which is up 4.1% 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% from a year ago. The median price in the Midwest was $200,200, up 1.9% from last year, the NAR said.
Existing-home sales in the South decreased 5.4% 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% from a year ago.
Existing-home sales in the West fell 3.6% to an annual rate of 1.08 million in September, 12.2% below a year ago. The median price in the West was $388,500, up 4.1% from September 2017.
Original source can be found here.