Sales of previously occupied US homes slowed in September to the weakest annual pace in nearly 14 years even as mortgage rates eased and the supply of properties on the market continued to climb.
Existing home sales fell 1% last month, from August, to a seasonally adjusted annual rate of 3.84 million, the National Association of Realtors said Wednesday. That’s the slowest annual sales pace since October 2010 when the housing market was still in a deep slump following the late-2000s real estate crash.
Sales fell 3.5% compared with September last year. The latest home sales were short of the 3.9 million pace economists were expecting, according to FactSet.
Despite the slower sales pace, home prices increased on an annual basis for the 15th consecutive month. The national median sales price rose 3% from a year earlier, to $404,500.
“Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months, but factors usually associated with higher home sales are developing,” said Lawrence Yun, the NAR’s chief economist.
As sales have slowed, the inventory of homes for sale has kept ticking higher. There were 1.39 million unsold homes at the end of September, up 1.5% from August and 23% from September last year, NAR said.
That translates to a 4.3-month supply at the current sales pace, up from a 3.4-month pace at the end of September last year. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.
The US housing market has been in a sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows. Existing home sales sank to a nearly 30-year low last year as the average rate on a 30-year mortgage surged to a 23-year high of nearly 8%, according to mortgage buyer Freddie Mac.
Mortgage rates mostly eased since July, reaching their lowest average in two years — 6.08% — four weeks ago, they’ve edged higher since then. The average rate was at 6.44% last week.