This morning the National Association of Realtors (NAR) reported that existing home sales in the U. S. (completed transactions for single-family homes, town homes, condominiums and co-ops) fell 2.2% in September to a seasonally adjusted annual rate of 5.38 million. With September's reading, overall existing home sales are up 3.9% when compared to the same time last year.
NAR chief economist Lawrence Yun stated: "We must continue to beat the drum for more inventory. Home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential."
As for pricing, the median existing home price increased 5.9% year over year to $272,100, which makes the 91st consecutive month of year over year price gains. Regarding 30-year, conventional, fixed-rate mortgages, the average commitment rate was 3.61% in September, slightly lower than $3.62% in August and down from 3.77% in July. It's clear that levels are all well below the 4.54% average commitment rate for all of 2018.
On the mortgage issue, Yun added, "Mortgage rates under 4% are amazingly attractive for homebuyers. The rise in foot traffic as evidenced by the open rates of SentriLock key boxes shows growing buyer interest."
A closer look by region shows, on a month over month basis, sales dropped in every region- the Northeast fell 2.8% (+1.5% year over year), theSouth fell 2.1% (+6.0% YoY), the West was down 0.9% (+5.6%), and the Midwest down 3.1% (flat YoY). Not surprisingly, home prices year over year were up in every region, however, there is evidence of slowing momentum in home price appreciation.
Given these stats, we conclude that it is still a great time to either buy or sell! A shortage of homes on the market is great for sellers. However, the slowing momentum in home price appreciation may be flashing a yellow light that prices may be topping out somewhat. Despite low interest rates, buyers can afford just so much!