Resale of homes in at least 14 years | The Arkansas Democrat-Gazette

LOS ANGELES — Sales of previously occupied homes in the U.S. slowed in September to the weakest annual pace in nearly 14 years, even as mortgage rates eased and the supply of homes on the market continued to rise .

Existing home sales fell 1% last month from August to a seasonally adjusted annual rate of 3.84 million, the National Association of Realtors said Wednesday. This marks the second consecutive monthly decline and the slowest annual pace of sales since October 2010, when the housing market was still in a deep slump following the housing bust of the late 2000s.

Sales fell 3.5% compared to September last year. Regionally, sales fell in the Northeast, South and Midwest last month from a year earlier, but rose in the West.

Overall, the latest home sales were below the 3.9 million pace economists had expected, according to FactSet.

“Factors that would drive home sales higher, such as significantly lower mortgage rates compared to a year ago, inventory starting to pick up, and of course jobs being continually added to the economy , and yet home sales remain at low levels,” said Lawrence Yun, chief economist for the Association of Realtors.

Despite the slower pace of sales, home prices rose annually for the 15th consecutive month. The national median sales price increased 3% from a year earlier to $404,500.

Although the rate of price growth has slowed, the latest average sale price is 49% higher than five years ago, before the pandemic. By comparison, wages grew by 25% in the same period, Yun noted.

Years of rising home prices have helped put home ownership out of reach for many Americans, making housing a key political issue for voters in next month’s election.

The U.S. housing market has suffered a sales slump dating back to 2022, when mortgage rates began rising from pandemic-era lows. Existing home sales sank to a near 30-year low last year as the average rate on a 30-year mortgage rose to a 23-year high of nearly 8 percent, according to the mortgage buyer Freddie Mac.

Mortgage rates have mostly declined since July in anticipation of the Federal Reserve’s decision last month to cut its key interest rate for the first time in more than four years and signal further cuts through 2026. Although that the central bank does not set mortgage rates, his policy pivot paved the way for mortgage rates to fall in general.

The average rate on a 30-year mortgage fell to 6.08% four weeks ago, its lowest level in two years, but has risen slightly since then, reaching 6.44% last week.

“The drop in mortgage rates in July and August was expected to bring more buyers into the market, but some homebuyers may expect rates to drop further,” said Lisa Sturtevant, chief economist at Bright MLS . “Others may be taking a wait-and-see approach ahead of the presidential election.”

Economists generally expect mortgage rates to remain near current levels, at least this year. Fannie Mae predicts that the rate on a 30-year mortgage will average 6.2% in the October-December quarter and will decrease to an average of 5.7% in the same quarter next year.

As sales have slowed, the inventory of homes for sale has continued to rise. There were 1.39 million unsold homes at the end of September, up 1.5% from August and up 23% from September last year, the association of estate agents said.

That translates to a 4.3-month supply at the current sales pace, up from a 3.4-month pace at the end of September last year. Traditionally, a 5-6 month supply is considered a balanced market between buyers and sellers.

Another factor helping to increase home inventory on the market: Properties are taking longer to sell than they did a year ago.

Homes typically stayed on the market for 28 days last month before being sold, up from 21 days a year earlier.

“Even with the recent increase in inventory you can tell it’s helping to loosen the market, but it’s still well below what would be considered a more normal level of inventory,” Yun said.

Still, in a boon for homebuyers, fewer homes are receiving multiple offers. About 20% of homes that sold last month were bought for more than their original list price, down from 26% in September of last year.

First-time homebuyers who don’t have any home equity to put toward a down payment continue to struggle to break into the housing market. They accounted for just 26% of all homes sold last month, matching August’s all-time low. It was down from 27% in September last year. Historically they have represented 40% of sales.

Homebuyers who can afford to avoid mortgage rates and pay all cash for a home accounted for 30% of sales last month, up from 29% a year earlier.