By Eye On Housing
Despite recent easing mortgage rates and improved inventory, existing home sales fell to a 14-year low in September as elevated home prices are causing potential buyers to hold out for lower rates, according to the National Association of Realtors (NAR). Sales remained sluggish as the lock-in effect kept home prices elevated. However, we expect increased activity in the coming months as mortgage rates moderate with additional Fed easing. Improving inventory should help slow home price growth and enhance affordability.
Homeowners with lower mortgage rates have opted to stay put, avoiding trading existing mortgages for new ones with higher rates. This trend is driving home prices higher and holding back inventory. With the Federal Reserve beginning its easing cycle at the September meeting, mortgage rates are expected to gradually decrease, leading to increased demand and unlocking lock-in inventory in the coming quarters.
Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 1.0% to a seasonally adjusted annual rate of 3.84 million in September, the lowest level since October 2010. On a year-over-year basis, sales were 3.5% lower than a year ago.
