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Total existing home sales during September declined by 2% from August to a seasonally adjusted annual rate of 3.96 million, according to new data from the National Association of Realtors (NAR). On a year-over-year basis, sales dropped 15.4% from the 4.68 million transactions in September 2022.

The median existing-home price for all housing types in September was $394,300, an increase of 2.8% from the $383,500 in September 2022. NAR Chief Economist Lawrence Yun observed, “For the third straight month, home prices are up from a year ago, confirming the pressing need for more housing supply.”

Total housing inventory totaled 1.13 million units by the end of September, up 2.7% from August but down 8.1% from the 1.23 million units available one year ago. Unsold inventory sits at a 3.4-month supply at the current sales pace, up from 3.3 months in August and 3.2 months in September 2022.

“As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” Yun added. “The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains.”

First-time buyers were responsible for 27% of sales in September, down from 29% in the prior month and one year earlier. All-cash sales accounted for 29% of transactions in September, up from 27% in August and 22% in September 2022. Distressed sales represented 1% of sales in September, unchanged from last month and the previous year.