Washington DC
CNN
—
Home sales fell to a 13-year low in September as soaring interest rates and rising home prices made it impossible to buy a home as the proportion of prospective buyers increased.
A historically low inventory of homes for sale continues to push prices higher, and interest rates that topped 7% in August dampened sales, according to the National Association of Realtors’ monthly report.
The median price for existing homes, which includes single-family homes, townhomes, condos and co-ops, was $394,300 last month. This was an increase of 2.8% compared to the same month last year, marking the third consecutive month of increase compared to the same month last year, and a record high for home prices in September. According to the NAR report, prices rose in all four regions of the country: the Northeast, Midwest, South and West.
“Home prices have increased year-over-year for three consecutive months, underscoring the urgent need to expand housing supply,” said Lawrence Yun, chief economist at NAR.
Existing home sales fell 2% from August to September due to inventory shortages and high prices, to a seasonally adjusted annual rate of 3.96 million units, slightly higher than analysts expected.
For the year, sales in September were 4.68 million units, down 15.4% from the previous year.
“As has been the case throughout this year, limited inventory and low home prices continue to hinder home sales,” Yun said. “Given slowing inflation and slowing job growth, the Fed simply cannot continue raising rates.”
Analysts expect further monthly declines in home sales through the remainder of the year, as the Fed signals that interest rates will “remain high for an extended period of time,” and mortgage rates will remain high as well. I predict that.
“At the beginning of this year, we thought sales would be down 10% or 15% for the year,” Yun said. “It will be about 20% compared to last year.”
This is a developing story and will be updated.
