• Sales of existing homes fell 1.5% to 4.71 million annualized units in September from the prior month, the slowest pace since May 2020.
• The inventory of unsold existing homes declined for the second straight month to 1.25 million in September from 1.28 million in August.
• Sales of existing homes were down on a year-over-year basis in each of the four major U.S. regions.

Sales of existing homes fell 1.5% in September to 4.71 million annualized units, the slowest pace since May 2020, according to the National Association of Realtors. This means 4.71 million units would be sold in 2022 if sales were at the same pace as they were in September. Existing-home sales fell on the month in the Northeast, Midwest, and South while sales were flat in the West. Existing-home sales were down on a year-over-year basis in each of the four major regions for the eighth straight month. 

On a year-ago basis, total existing-home sales were down 23.8% in September; sales of single-family homes were down 23.0% while sales of condos and co-ops tumbled 30.0%. The median existing-home selling price for all housing types was $384,800, up 8.4% from September 2021 ($355,100). The median existing single-family home price was $391,000 up 8.1% from September 2021. The median existing condo price was $331,700, an annual increase of 9.8%. The months’ supply of existing homes for sale was 3.2 months in September at the current sales pace, unchanged from July and August. Properties typically remained on the market for 19 days in September, up from 16 days in August and 17 days in September 2021. 

Existing-home sales declined for the eighth consecutive month as rising mortgage rates, elevated house prices, and worsening economic conditions weighed on housing activity. Housing inventory was low coming into the pandemic after many years of underbuilding following the Great Recession. But homebuilders have grappled with inflation, supply-chain disruptions, and labor constraints, putting downward pressure on the inventory of unsold existing homes. As the Fed continues its aggressive hiking cycle, activity will decline further in interest-rate-sensitive sectors, particularly housing. Mortgage rates will continue their upward trajectory in the near term but should stabilize by mid-2023.