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Sales of existing homes shouldered an eighth consecutive month of declines in September, according to data released Thursday.
Existing-home sales sagged 1.5 percent to a seasonally adjusted annual rate of 4.71 million, 23.8 percent lower than they were in September 2021 when mortgage rates were significantly lower, according to the National Association of Realtors.
“The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6 percent for 30-year fixed mortgages in September and are now approaching 7 percent,” NAR Chief Economist Lawrence Yun said. “Expensive regions of the country are especially feeling the pinch and seeing larger declines in sales.”
Home sale prices continued to increase, however, jumping 8.4 percent from one year ago to $384,800 thanks to low inventory. September marked 127 straight months of yearly sale price increases, according to the NAR.
Inventory of unsold existing homes declined for the second straight month to 1.25 million by the end of September, equivalent to a 3.2 month supply at the current sales rate.
“Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” Yun added. “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”
The typical property remained on the market for 19 days in September, up from 16 days in August and 17 days in September 2021. 70 percent of homes sold in September were on the market for less than a month, according to the NAR.
Experts said the 1.5 drop in home sales between August and September represents relative sustainability compared to some of the dramatic fluxes recorded last year.
“Despite continued small monthly declines in September, existing home sales seem to have found a somewhat sustainable level, coming in at an annualized rate of 4.71 million last month – not far off the roughly 4.8 million recorded the past two months,” Neda Navab, president of brokerage operations on Compass said in a statement. “This level is below historic and pre-pandemic averages (roughly 5.2 million-5.3 million in a given month over the past decade), but still closer to those averages than the unsustainable, record levels experienced last year.”