Existing-home sales dropped in September amid reduced home affordability, as prices continued to rise on an annual basis, the National Association of Realtors (NAR) reported.
“Affordability has fallen to a five-year low as home price increases easily outpaced income growth,” said Lawrence Yun, chief economist at NAR. “Expected rising mortgage interest rates will further lower affordability in upcoming months. Next month we may see some delays associated with the government shutdown.”
Existing-home sales declined 1.9 percent to a seasonally adjusted annual rate of 5.29 million in September from a downwardly revised 5.39 million in August, according to NAR.
Housing inventory in September remained flat at 2.21 million for-sale existing homes, representing a 5-month supply of homes at the current rate of home sales, NAR said. That’s up slightly from a 4.9-month supply in August but down from a 5.4-month supply a year before, according to the trade group.
Home prices, meanwhile, posted their 10th straight year-over-year increase in the double digits, according to NAR. They were reportedly up 11.7 percent compared to September 2012.