Windermere’s Principal Economist Jeff Tucker looks at September’s “disappointing” existing-home sales report and discusses some of the factors impacting the numbers.
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In this exclusive series on Inman, Windermere’s Principal Economist Jeff Tucker illuminates the latest stats, reports and numbers to know this week.
Today’s number you should know: 3.84 million.
That’s the annualized rate of existing home sales in September, which came in below expectations. It’s also down 1 percent from the sales pace in August, and down 3.5 percent year over year.
This was a disappointing report. It’s a measure of just how frozen the real estate market still is, largely due to high interest rates discouraging sales activity.
Maybe surprisingly, the median price of existing homes sold in September climbed 3 percent year-over-year, up to $404,500.
That’s not a very fast pace of appreciation; in fact it’s right around the overall pace of inflation in the country right now, but the fact that it’s still positive suggests that this is a fairly balanced market.
Another indicator of a balanced market this month: inventory. There were 4.3 months of supply in September, up from 4.2 in August and even a little more than in September 2019.
So now we can finally say that buyers are not facing unusually low inventory, arguably for the first time in almost five years.
One final wrinkle for existing-home sales: The West was the only region that bucked the downward trend.
In the West, sales actually rose 5.6 percent year over year. It’s not totally clear why but it might reflect buyers in the West reacting a little more quickly to the drop in interest rates through August and early September.
Another notable number: 6.92 percent.
That’s where the 30-year mortgage rate stood on Wednesday, Oct. 23, according to Mortgage News Daily. It’s up more than three-quarters of a point from where it stood in early September, though it’s still down about half a point from where it was in May. There’ve been a couple of sharp upward movements in rates over the past month due to a few reasons.
First, the strong September jobs report and firm inflation data for September both helped to shrink the perceived risk of a recession and a drastic rate-cutting cycle. Secondly, it does seem that uncertainty around the election, and potential higher deficits next year, are raising borrowing rates. All of that created a perfect storm for interest rates to rise in the last month.
Jeff Tucker is the Principal Economist for Windermere Real Estate in Seattle, Washington. Connect with him on X or Facebook.
