Existing-home sales flop once again, but inventory is a bright spot

Existing-home sales continued their downward trend in September. After falling 2.5% from July to August, sales again trended down last month, dropping 1% to a seasonally adjusted annual rate of 3.84 million, according to data released Wednesday by the National Association of Realtors (NAR)

On a year-over-year basis, existing-home sales were down 3.5% in September. And while the slower sales pace may not be great news for real estate professionals, it has resulted in an uptick in inventory, which is good news for homebuyers.

For-sale inventory at the end of September was 1.39 million, up 1.5% from August and up 23% from one year ago. At the current sales pace, this represents a 4.3-month supply of unsold inventory, up from 4.2 months in August and 3.4 months in September 2023.

“Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months, but factors usually associated with higher home sales are developing,” NAR chief economist Lawrence Yun said in a statement.

“There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy. Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”

While the uptick in inventory is certainly a positive for buyers, NAR’s report found they are continuing to contend with rising home prices. In September, the median sales price for an existing home was $404,500, up 3% from a year ago.

“Moderating home price increases are welcome news for home buyers,” Yun said. “With wage growth now outpacing home price appreciation, housing affordability will improve.”

Regionally, the pace of existing-home sales fell in the Northeast, Midwest and South on both a monthly and yearly basis. The Northeast had the largest drop-offs in each case, down 4.2% from August and down 6.1% from September 2023. But the West saw monthly and yearly increases of 4.2% and 5.6%, respectively.

NAR also reported the results of its monthly Realtors Confidence Index, which found that homes typically remained on the market for 28 days in September, up from 26 days in August and 21 days in September 2023.

Additionally, the report found that first-time buyers were responsible for 26% of all home sales in September, matching the record-low set in August 2024 and in November 2021. By contrast, all-cash sales accounted for 30% of sales in September, up from 26% a month ago. But individual investors or second-home buyers who are responsible for many cash sales purchased 16% of homes in September, down three percentage points from August.