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Home Sales Fall to the Lowest Level Since 2010
October 25, 2024
The U.S. housing market continued its slump last month, with existing home sales falling to the lowest level in 14 years.
Sales of previously owned homes, which account for the bulk of the market, fell 1% in September from the month prior to a seasonally adjusted, annualized rate of 3.84 million, according to the National Association of Realtors (NAR). That is the lowest monthly sales total since October 2010.
On a year-over-year basis, sales were 3.5% lower than in September 2023. Sales declines were widespread, with three out of four U.S. regions seeing lower sales. The West region was the only one to see a gain.
The sales figures are based on closings, meaning contracts that were signed primarily in July and August. Rates on a standard 30-year fixed mortgage at the start of July were near 7% and fell to below 6.5% by the end of August. Rates are now more than a full percentage point lower than they were a year earlier.
Home sales have been stuck at a level of around 4 million units per month for the past 12 months, but NAR economists are optimistic that the conditions are forming that will support more robust sales activity in the future.
Inventory continues to climb, increasing 1.5% last month from the month before to 1.39 million units on the market as of the end of September, That represents a 4.3-month supply at the current sales pace. Although a 6-month supply is generally considered healthy, inventory is up 23% from September 2023, a welcome sign for prospective buyers.
With inventory still constrained, prices continue to push higher. The median price of a previously owned home sold in September was $404,500, an increase of 3% annually and the 15th consecutive month of annual price gains.
This has left many prospective buyers, particularly at the entry-level end of the market, priced out. Just 26% of homes sold in September went to first-time buyers, tying an all-time low set in August.