US Existing Home Sales Stuck Near 15 Year Lows As Prices Keep Rising

Following yesterday’s surge in new home sales (thanks to a huge wave of incentives from homebuilders), existing home sales brought us back to earth with a 0.2% MoM decline (better than the 1.4% MoM drop expected)

Source: Bloomberg

The total existing home sales SAAR dipped back to 4.00 million, hovering near the lowest levels since 2010…

Source: Bloomberg

The median sales price, meantime, rose 2% from a year ago to $422,600, extending a string of straight year-over-year gains since mid-2023, NAR data show.

Prices remain out of reach for many Americans, having risen more than 50% since the pandemic.

“Home sales have been sluggish over the past few years due to elevated mortgage rates and limited inventory,” NAR Chief Economist Lawrence Yun said in a statement.

“However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months.”

There is certainly room to run for sales if mortgage rates sustain this decline…

But the question remains – why haven’t existing home sales already moved?

Existing-home sales in the South, the country’s biggest home-selling region, decreased 1.1% to an annualized rate of 1.83 million. Sales saw slight gains in the West and Midwest, while they fell 4% in the Northeast.

Individual investors or second-home buyers purchased 21% of homes last month, compared with 20% a month earlier. And, first-time buyers accounted for 28% of closings, unchanged from July.

On the bright side, the affordability crunch, however, is slowly easing. Two-thirds of the US’s most populous metropolitan areas were buyer’s markets last month, meaning sellers outnumber buyers by at least 10%, according to research from online housing marketplace Redfin.