Home Prices are Gaining Steam, but Buyers Can’t Keep up
October 22, 2019
After two strong months of gains, September’s home sales saw an unexpected decline. Sales of existing homes fell 2.2 percent last month, far more than the 0.75 percent drop that economists had been expecting.
Inventory continues to be an issue, as there were 3 percent fewer homes on the market in September as compared to a year earlier. This marks the fourth straight month that year-over-year inventory has seen a decline.
Big increases in prices are also holding the market back. The median price for an existing home was 5.9 percent higher in September than the same month last year. This is the largest year-over-year price increase since January 2018. Much of this price increase is due to falling mortgage rates. While lower rates can help with affordability, it also means that buyers’ money has more purchasing power, driving prices higher.