Welcome to Extreme Investor Network, where we provide you with expert insights and analysis on the latest business news. Today, we are diving into the recent report from the National Association of Realtors on the state of the housing market.
In September, sales of previously owned homes saw a 1% decline compared to August, with a seasonally adjusted annualized rate of 3.84 million units, the slowest pace since October 2010. Sales were also down 3.5% compared to September 2023, with three out of four U.S. regions experiencing a drop in sales.
One factor contributing to the slowdown in sales is the rise in mortgage rates. Rates started near 7% in July and fell to just below 6.5% by August, now more than a full percentage point lower than a year ago. Despite this, Lawrence Yun, Chief Economist for the National Association of Realtors, remains optimistic, stating that factors associated with higher home sales are developing.
Inventory levels saw a 1.5% increase in September, with 1.39 million homes for sale representing a 4.3-month supply at the current sales pace. This is a 23% increase from September 2023. While more inventory is good news for buyers, the low inventory of distressed properties is leading to higher prices. The median price of an existing home sold in September was $404,500, marking a 3% increase year over year.
Cash continues to play a significant role in the market, making up 30% of September sales compared to the pre-Covid level of 20%. Interestingly, cash buyers are not just investors, as investor activity actually decreased slightly in September. Homes are sitting on the market longer, with an average of 28 days compared to 21 days a year ago. Additionally, first-time buyers made up just 26% of September sales, matching the all-time low from August.
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