Sales of existing homes plunged in September, but prices did not

There were more houses for sale in September but fewer buyers - Photo (c) by UnSplash +.

The median home price has risen for 15 straight months

Despite falling mortgage rates during most of the month, sales of existing homes fell by a full percentage point in September, the worst showing in 14 years.

The National Association of Realtors reports three out of four major U.S. regions registered sales declines while the West experienced a sales bounce. Year-over-year, home sales were down 3.5%.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell to a seasonally adjusted annual rate of 3.84 million in September. 

“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 NAR Chief Economist Lawrence Yun. 

Waiting out the election?

“There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy. Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”

The drop in home sales contributed to more inventory. The inventory of unsold existing homes rose by 1.5% from the prior month to 1.39 million at the end of September, or the equivalent of 4.3 months’ supply at the current monthly sales pace.

Even though there were significantly fewer buyers last month, the median home price rose, to $404,500, the 15th consecutive month of year-over-year price increases. That suggests most of the sales were of large, expensive homes. First-time buyers were responsible for only 26% of sales in September – matching the all-time low from August 2024 and November 2021.

All-cash sales totaled 30%, suggesting real estate investors remain active in the housing market.

A lot fewer bargains

“More inventory is certainly good news for home buyers as it gives consumers more properties to view before making a decision,” Yun said. “However, the inventory of distressed properties is minimal because the mortgage delinquency rate remains very low. Distressed property sales accounted for only 2% of all transactions in September.”

Distressed properties usually sell for a below-market price, giving first-time homebuyers and those on a budget more opportunities. While thousands of distressed properties were available after the 2008 housing market crash, they are more rare now.

There were fewer single-family home sales last month as that category fell by 0.6%. The median existing single-family home price was $409,000 in September, up 2.9% from September 2023.

Existing condominium and co-op sales dropped 5.1% in September to a seasonally adjusted annual rate of 370,000 units. That’s down 14% from one year ago. The median existing condo price was $361,600 in September, up 2.2% from the previous year.

Take a Home Warranty Quiz. Get matched with an Authorized Partner.