After reaching 17-month high last month, existing home sales in the US, released by the National Association of Realtors (NAR) Tuesday, fell more than expected in September 2019 despite low mortgage rates.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, dropped -2.2% to a seasonally adjusted annual rate of 5.38 million in September. However, sales were still +3.9% higher than one year ago.
The September inventory stayed the same at 1.83 million units from August but decreased from 1.88 million units a year ago.
At the current sales rate, the September unsold inventory represents a 4.1-month supply, up from a 4.0-month supply last month and down from a 4.4-month a year ago.
US existing homes-for-sale stayed on the market for an average of 32 days in September, up from 31 days last month and equal to a year ago. In September, 49% of homes sold were on the market for less than a month.
The September all-cash sales shared 17% of transactions, down from 19% last month and 21% a year ago.
The September median sales price of all existing homes was US$272,100, up +5.9% from a year ago, representing the 91st consecutive month of year-over-year increases.
The median existing condominium/co-op price of US$248,600 in September was up +4.5% from one year ago.
Looking more closely at prices, US house prices rose in August, up +0.2% from the previous month, according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI) FHFA House Price Index Up 0.2 Percent in August; Up 4.6 Percent from Last Year, released Wednesday. House prices rose +4.6% from August 2018 to August 2019. The previously reported +0.4% increase for July 2019 remains unchanged.
This monthly decline indicates that existing home sales are not consistently increasing in response to falling mortgage rates, as rapidly rising home prices, and tight inventory continue to weigh on housing sector and prevent home sales growth, said the National Association of Home Builders. As mortgage rates below 4% are very attractive to homebuyers, more new home building is needed to meet housing demand.