Home Sales Fall to Level Not Seen Since 2010

In September, home sales dropped 1% when compared to August. The number of previously owned homes sold came in at a seasonally adjusted rate of 3.84 million. The National Association of Realtors (NAR) noted this is the slowest home sales have been since October 2010.

In addition, home sales were 3.5% lower than in September 2023. Of the four U.S. regions, only the West experienced a gain. According to the NAR’s chief economist, Lawrence Yun, the current sales pace has been hovering around 4 million units over the past year, yet conditions affecting the real estate market seem to be improving.

By the end of September, there were 1.39 million homes on the market, up 1.5% month to month and 23% more than the same month last year. With that many homes for sale, realtors can reasonably expect current inventory to last just a little over four months.

“More inventory is certainly good news for home buyers as it gives consumers more properties to view before making a decision,” said Yun, per CNBC. “However, the inventory of distressed properties is minimal because the mortgage delinquency rate remains very low.”

Median Home Price Increased and Possible Lower Mortgage Rates

Last month, $404,500 was the median sales price for an existing home, which is 3% higher year over year. This represents the 15th consecutive month prices have increased.

On top of slightly higher sales prices, homes are sitting on the market longer. Listed homes are taking about 28 days to sell versus September last year’s average of 21 days. First-time homebuyers may also be waiting to purchase as that group only made up 26% of the sales last month.

Home sales may be slowing as buyers anticipate lower mortgage rates. While the Federal Reserve did lower its policy rate by 50 basis points in September, the move does not directly affect the rates on long-term loans such as mortgages. However, many buyers see the central bank’s cut as a sign that mortgage rates could also drop as the economic environment improves.

“Falling mortgage rates in July and August were expected to bring more buyers into the market, but some home shoppers may be holding out for rates to fall further,” said economist Lisa Sturtevant, per ABC News.