Existing home sales plunge to 10-year low in September amid soaring mortgage rates

Real estate broker Rebecca Van Camp holds up a “Sold” placard in front of her home in Meridian, Idaho, Wednesday, Oct. 21, 2020.

Darrin Oswald | Tribune News Service | Getty Images

Pre-owned home sales are at their slowest pace since September 2012, but slowed slightly at the beginning of September 2012. Covid 19 Pandemic.

Existing home sales fell 1.5% in September from August to a seasonally adjusted annualized rate of 4.71 million units, according to the National Association of Realtors monthly survey.

This is the eighth straight month of sales decline. Sales fell 23.8% for him over the same period last year.

Mortgage interest rates soar causing a sharp slowdown in the housing market. The average interest rate on a 30-year fixed mortgage was around 3% this year, and now he’s just over 7%. This makes an already expensive housing market even more affordable.

Inventories continue to decline despite slowing sales. He sold 1.25 million units at the end of September, down 0.8% compared to September 2021. At the current sales pace, that’s equivalent to 3.2 months of supply. Six months is considered a balanced supply.

“Despite weak sales, more than a quarter of homes are selling above list price due to limited inventories, and multiple homes are selling at a premium,” said NAR chief economist Lawrence Yun. Offers still happening: “The current supply shortage contrasts with the previous major market downturn in 2008-2010, where inventory levels were four times what they are today.”

Tight supply continues to put pressure on house prices. The median price of pre-owned homes sold in September was $384,800, up 8.4% from September 2021. Prices have increased across all price points. This marks the 127th consecutive month of annual increases.

However, prices are dropping. September marked his third month in a row of falling prices, which usually fall at this time of the year.

That said, this year’s decline is even more severe, especially in the low-end segment where inventories are scarce. Sales of homes between $100,000 and $250,000 fell 28.4% year-over-year, while sales of homes between $750,000 and $1 million fell 9.5%.

Homes stayed in the market slightly longer, an average of 19 days in September, from 16 August and 17 September 2021.

Rising mortgage rates aren’t just making potential buyers uneasy. They also keep sellers on the sidelines, which contributes to the tightness in inventories.

“Homeowners love the 3% mortgage rate and don’t want to give it up,” said Yun.

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