Sales of previously owned US homes slowed to their lowest rate in nearly 14 years last month, according to industry data released Wednesday, despite cooler mortgage rates.
Existing home sales retreated 1.0 percent from August to September, reaching an annual rate of 3.84 million, seasonally adjusted, said the National Association of Realtors (NAR).
Consensus estimates published by Briefing.com expected a slight uptick instead.
“Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election,” said NAR chief economist Lawrence Yun.
Yun told reporters that this is the lowest figure since October 2010 when the housing market was in a slump.
He added that the latest slip comes despite developments that are usually associated with higher home sales.
“There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy,” Yun said.
Although mortgage rates rose quickly in recent years as the Federal Reserve rapidly hiked the benchmark lending rate to curb surging inflation, the levels have come down somewhat since the central bank started cutting rates last month.
As of September 26, the popular 30-year fixed-rate mortgage averaged 6.1 percent.
This was down from 6.4 percent in the last week of August and significantly below the 7.3 percent in late September last year.
In October, mortgage rates ticked up slightly.
Part of the reason home sales have been stalling is that existing homeowners are reluctant to enter the market after having locked in lower mortgage rates previously.
From September 2023, home sales were down 3.5 percent, according to the NAR.
The median price of existing homes was $404,500, and this was 3.0 percent higher than the same period a year ago.
Home sales is expected to recover modestly in the final months this year, gaining traction in 2025, said Nancy Vanden Houten, senior economist at Oxford Economics.
Analysts have noted that a renewed fall in interest rates over the longer run could boost sales.
But Vanden Houten conceded that “the recent rebound in mortgage rates and Hurricanes Helene and Milton might delay that recovery.”
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