For the eighth consecutive month, existing home sales fell in September 2022, this time contracting 1.5% from August 2022 to a seasonally adjusted rate of 4.71 million units. On a yearly basis, sales fell 23.8% as the market recorded 6.18 million sales.
This information comes from National Association of Realtors monthly Existing Home Sales Reportwhich tracks transactions across the country, including single family homes, townhouses, condominiums and co-ops.
“The housing sector continues to experience an adjustment due to the continued rise in interest rates, which eclipsed 6% for 30-year fixed mortgages in September and are now approaching 7%,” said Lawrence Yun, chief economist of the NAR. “Expensive parts of the country are particularly feeling the pinch and are seeing bigger sales declines.”
The total amount of registered housing stock at the end of September was 1.25 million units, down 2.3% from August and 0.8% from the same period last year. Unsold inventory sits at 3.2 months supply at the current selling rate, unchanged from August and up from 2.4 months in September 2021.
“Despite weaker sales, several offers are still in place, with more than a quarter of homes selling above list price due to limited inventory,” Yun added. “The current lack of supply underscores the vast contrast to the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”
The median existing home price (which includes all housing types) rose 8.4% to $384,800 from the $355,100 reported in September 2021.
“This marks 127 consecutive months of year-over-year increases, the longest streak on record. It was the third month in a row, however, that the median selling price faded after hitting a low record high of $413,800 in June, the usual seasonal price trend running out of steam after peaking in early summer,” the NAR said.
Properties generally remained on the market for 19 days in September, compared to 16 days in August and 17 days in September 2021. Seventy percent of homes sold in September 2022 were on the market for less than a month.
First-time buyers were responsible for 29% of sales in September, unchanged from August and slightly higher at 28% from September 2021. Cash sales accounted for 22% of all sales in September, up from 24% in August.
Individual investors or buyers of second homes, which make up many cash sales, bought 15% of homes in September, up from 16% in August, but up from 13% in September 2021.
Distressed sales – foreclosures and short sales – accounted for 2% of sales in September, a marginal increase from 1% in August 2022 and September 2021.
On a regional basis, existing home sales in the Northeast fell 1.6% from August to an annual rate of 610,000 sales at a median price of $418,500 (8.3% from August). to last year).
In the Midwest, sales fell 1.7% from August to an annual rate of 1.14 million (down 19.7% from a year ago). Homes sold at a median price of $281,500, up 6.9% annually.
In the South, sales fell 1.9% in the month to an annualized rate of 2.08 million units (representing a 23.8% annual decline) at a median price of $351,700, which alone represents 11.8% compared to last year.
In the West, home sales were flat for the month at 880,000 units (down 31.3% yoy) which sold at a median price of $595,400, representing an annual increase of 7.1%.
“Existing home sales were little changed in September, after a moderate decline in August pending home sales,” said Danielle Hale, chief economist at Realtor.com. “A summer lull in mortgage rates, from mid-June to early August, appears to have made the difference for homebuyers trying to balance housing dreams with budget realities in an inflationary environment.”
“Mortgage rates have since risen and are now higher than the early August low of just below 5%, increasing the level of difficulty of the budget acrobatics required for today’s buyers,” he said. Hale continued. “This will likely mean further weakening in home sales and home price growth in the months ahead. In September, the median home sale price remained higher than a year ago, but again the pace of growth slowed.
“Despite the economic uncertainty ahead, a still strong job market is creating demand for housing. But some households that have been challenged by the home buying market and do not expect conditions to become more favorable in the very short term are choosing to rent. Rent growth, although continuing at a higher than normal pace, cooled to single digits as builders focused on multi-family dwellings, with the resulting increase in the number of units completed contributing to further balance the rental market.
“The shift in housing demand towards rentals is also helping to reset the sales market. The number of active homes for sale, those whose sellers are still looking for an offer, was up nearly 27% from a year ago in September. A sign of the market moving away from its previous equilibrium, even with this improvement inventories remain 40% below their 2019 level. pre-pandemic, above 2017 and 2019 but below 2018, hinting at the possibility of a new equilibrium as tech-savvy buyers become more efficient in their home search.”
“While we often talk about a national housing market, it is really the sum of the trends of tens of thousands of local housing markets across the country,” Hale concluded. “While the domestic market finds itself at an inflection point, the range of local market conditions has widened. According to Realtor.com’s September Hottest Markets report, Northeast and Midwest metros that offer relative real estate affordability continue to be sought after by buyers. In these hottest markets, September’s level of competitiveness against the typical US market is tied to the April 2021 record of 2.3x more pageviews per property.
Click here to view the full report.