Despite mortgage interest rates being eased in September, sales of existing homes declined as home seekers remained cautious about purchasing a home.
Existing home sales rose to a seasonally adjusted annual rate of 3.84 million units, down 1.0% from August’s tally, the National Association of Realtors said Wednesday. This is the lowest level since October 2010. Economists polled by Bloomberg had expected the pace for September to be 3.88 million.
Existing home sales in September fell 3.5% on an annual basis. The median home price increased 3.0% from last September to $404,500, marking the 15th consecutive month of annual price increases.
“Home sales have essentially been stuck at around 4 million units for the past 12 months,” NAR Chief Economist Lawrence Yun said in a press release.
There are significant challenges weighing on sales activity, including inventory shortages, soaring prices, and rising mortgage rates. But last month, those factors changed for the better.
The Federal Reserve lowered its benchmark interest rate by 0.5 percentage point in September. Central banks do not set mortgage rates, but their actions influence their direction.
Mortgage rates hit their lowest levels since February 2023 ahead of the Fed’s decision to ease, while publicly traded inventories rebounded.
But overall, that wasn’t enough to attract buyers.
“Some consumers are hesitant to make major expenditures such as buying a home before the next election,” Yun said.
