Existing home sales fell in the September 2019 Housing Market Recap after two months of gains. Sales dropped across all four regions, with the Midwest taking the biggest loss. Prices rose yet again, as they have for over seven and a half years. Days on the market rose slightly, and inventory fell year-over-year, keeping the focus on the shortage of homes. One bright spot on the inventory front is the change in FHA financing that creates more opportunities for condo purchases via FHA loans.
September existing home sales fell 2.2 percent from August, but were up 3.9 percent compared to September 2018, according to the National Association of Realtors® (NAR) September Existing Home Sales Report, released October 22nd.
Home prices rose again. The median price of existing homes sold in September was $272,100, an increase of 5.9 percent from September 2018 ($256,900). We’ve now reached 91 consecutive months of year-over-year increases.
Days on the market (DOM) increased compared to August, moving from 31 to 32. This mirrors DOM in September 2018. Another way to look at this is that 49 percent of homes were listed and sold within a month. Buyers continue to move quickly.
Inventory stayed about the same as it was in August. However, it fell 2.7 percent year-over-year. At the current sales rate, the supply of unsold inventory was 4.1 months, down from 4.4 months a year ago. (NAR considers 6 months of inventory a balanced market.)
NAR chief economist Lawrence Yun pointed out that despite recent low mortgage rates, the inventory shortage has had an adverse effect on sales volume. “We must continue to beat the drum for more inventory,” said Yun, who has called for additional home construction for over a year. “Home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential.”
Sales dropped across all regions. Comparing September to August, sales fell 0.9 percent in the West, 2.1 percent in the South, 2.8 percent in the Northeast, and 3.1 percent in the Midwest. The Midwest led increases in year-over-year median home prices, rising 7.2 percent, followed by the South at 6.3 percent, the Northeast at 5.2 percent, and the West at 4.5 percent.
Hottest markets. NAR has revised their market hotness report to provide more analysis, but the goal remains to reflect supply and demand by comparing median days on the market (supply) and listing views per property (demand). It’s interesting to see which markets are moving quickly because it may not be what you expect. The September top ten are Fort Wayne, IN, Rochester, NY, Pueblo, CO, Columbus, OH, Topeka, KS, Midland, TX, Buffalo-Cheektowaga-Niagara Falls, NY, Janesville-Beloit, WI, Kennewick-Richland, WA, and Sioux City, IA-NE-SD.
The takeaway. It’s hard to find a new way to say prices are rising and inventory is low. It’s been the same story for years, and it’s not clear when it will change. If you’re a buyer, the advice stays the same. Think financing first by talking to a First Choice Loan Services Inc. mortgage loan originator. Next, work with a trusted Realtor® and expand your search to include more neighborhoods and/or homes that need some work. Finally, stay positive. As we move into fall, you may find sellers are more motivated and new inventory is coming on the market.