National sales of existing homes recently fell to a seven-month low, as surging borrowing costs, rising sales prices, and limited inventory continue to keep many would-be buyers out of the market. Borrowers have become increasingly sensitive to fluctuations in mortgage rates, which have remained above 7% since mid-August. With fewer buyers able to afford the costs of homeownership, existing home sales declined 0.7% month-over-month and were down 15.3% year-over-year, according to the National Association of REALTORS® (NAR).
New listings increased by 2.9% for residential homes and 5.9% for townhouse/condo homes. Pending sales decreased by 1.6% for residential homes but increased by 14.3% for townhouse/condo homes. Inventory decreased by 2.2% for residential homes and 15.3% for townhouse/condo homes.
Median sales price increased by 10.3% to $297,800 for residential homes and 13.5% to $227,000 for townhouse/condo homes. Days on market decreased by 7.1% for residential homes but increased by 52.4% for townhouse/condo homes. Months supply of inventory increased by 11.1% for residential homes and 7.7% for townhouse/condo homes.
Prices have continued to increase this fall despite softening home sales nationwide, as a lack of inventory has kept the market competitive for prospective buyers, sparking bidding wars and causing homes to sell for above asking price in some areas. Heading into September there were only 1.1 million units available for sale, 0.9% fewer than a month ago and 14.1% fewer than the same period last year, according to NAR. As a result, the U.S. median existing-home sales price rose 3.9% year-over-year to $407,100, marking the third consecutive month that the median sales price topped $400,000.