According to the National Association of Realtors, condo sales fell 1% in September compared to August to a seasonally adjusted annual rate of 3.84 million units, the slowest pace since October 2010.
Sales were 3.5% lower than September 2023. Sales fell in three of four U.S. regions, with only the West region seeing an increase.
This count is based on deals, which are contracts expected to have been signed in July and August. Mortgage rates for 30-year fixed loans started around 7% in July and then slowly fell to just under 6.5% through August. Interest rates are now more than a full percentage point lower than they were a year ago.
“Over the past 12 months, home sales have essentially remained stagnant at about four million units, but factors that typically accompany higher home sales are evolving,” said Lawrence Yun, chief economist at the National Association of Realtors.
A sign reading “For Rent, For Sale” is seen outside a home in Washington, United States, July 7, 2022.
Sarah Silbiger | Reuters
Inventory rose 1.5% month over month to 1.39 million homes for sale at the end of September. That's a 4.3-month supply at the current sales pace. Inventory was 23% higher since September 2023.
“More inventory is certainly good news for home buyers as it allows consumers to view more properties before making a decision,” Yun said. “However, the inventory of distressed properties is minimal as the mortgage default rate remains very low. Distressed property sales accounted for just 2% of all transactions in September.”
The pressure from still low inventories continues to drive prices higher. The average price of an existing home sold in September was $404,500, up 3% from a year ago and the 15th consecutive month of annual price increases.
Cash remains king in this market, accounting for 30% of September sales. Before Corona, cash buyers accounted for about 20% of sales. Yun pointed out that it's not just investors who are using cash, as investors actually saw a slight decline to just 16% of sales in September, compared to 19% in August.
Homes are staying up longer, an average of 28 days compared to just 21 days a year ago. First-time buyers pulled back again, accounting for just 26% of September sales. This corresponds to the all-time low in August.