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US existing home sales drop in September as mortgage rates rise
WASHINGTON, Oct 20, 2018 (BSS/AFP) – With mortgage rates on the rise,
sales of US existing homes dropped sharply last month to the lowest rate in
three years, the National Association of Realtors said Friday.
Home prices remained high and with a decline in homes on the market, many
would-be homeowners are unable to purchase.
NAR said home sales fell 3.4 percent in September after stagnating in
August, the fifth decline in six months. Analysts had expected the rate to
hold steady.
The rate of 5.15 million, seasonally adjusted, means sales of single-
family homes, townhomes, condominiums and co-ops are down 4.1 percent since
September of last year.
“This is the lowest existing home sales level since November 2015,” NAR
Chief Economist Lawrence Yun said in a statement.
He blamed rising interest rates for “preventing consumers from making
quick decisions on home purchases. All the while, affordable home listings
remain low.”
The median home price jumped 4.2 percent compared to 2017, to $258,100,
the 79th month of year-over-year increases, despite dipping slightly in the
past three months.
Falling sales were seen throughout the country, except the Midwest, where
they were flat.
The inventory of available homes for sale continued its upward trend,
rising to 4.4 months — at the current sales pace — from 4.3 in the prior
three months. And homes are staying on the market slightly longer than in
August.
Rising material costs, especially lumber which is subject to import
tariffs imposed by President Donald Trump, as well as a shortage of labor,
has slowed home construction, putting more pressure on the housing market.
Ian Shepherdson of Pantheon Macroeconomics said banks imposing tighter
lending standards also contributed to slowing sales, as did the new limits on
state and local tax deductions in the US tax measure passed in December.
He also noted that recent hurricanes in the Southeast United States could
hit the numbers.
“Hurricane Florence likely depressed the September numbers too,” as sales
in the South saw the biggest decline, he said in a research note. “October
likely won’t be much better, if at all, in the wake of Hurricane Michael.”
BSS/AFP/HR/1010