U.S. Existing Home Sales (September 2024)

U.S. existing home sales pull back in September, fall to lowest level since late 2010

• Existing home sales fell 1.0% month-on-month (m/m) to 3.84 million units (annualized) in September, coming in below market expectations for a moderate gain of 0.5%. Sales were down 3.5% from a year ago. 
• Single-family home sales fell 0.6% to 3.47 million units, while sales in the smaller condo/co-op segment fell 5.1% to 370 thousand.
• Activity deteriorated across most Census regions, with sales falling 4.2% (m/m) in the Northeast, 2.2% in the Midwest and 1.7% in the South. The West Census region was the only detractor, with activity there rising 4.1% (m/m).
• Total housing inventory in September was 1.39 million units, up 1.5% from August and 23% from a year earlier. Measured at the current sales rate and seasonally adjusting, unsold inventory sat at 4.1 months' supply – up from 3.9 months in August and 3.2 months in September 2023. This latter measure appears to have entered balanced territory (typically between 4 and 6 months).
• House prices were up 3.0% from a year ago, a mild increase from 2.5% (y/y) in the month prior. On a seasonally adjusted basis, median home prices rose 0.3% m/m, after falling by 0.1% in the month prior (seasonal adjustment performed by TD Economics).  

Key Implications

• An easing in mortgage rates through late summer appears to have failed to give housing activity a boost, with existing home sales falling to a 14-year low in September. Looking past the sour headline, there were some green shoots in today's report. For one, home prices continue to hold up relatively well, while housing inventories also continue to grind higher. The seasonally adjusted months supply of inventory rose to 4.1 in September, finally entering balanced territory for the first time in four years.
• With the Fed to remain in interest-rate cutting mode, borrowing rates should trek lower in the year ahead and should eventually help kick housing activity into higher gear. Still, as developments from this month show, interest rates rarely move in a straight line. The sharp increase in mortgage rates this month – up 60 basis points from the end of September to over 6.8% recently – are likely to mark another bump on the road for housing, with higher frequency indicators such as weekly mortgage purchase applications already indicating a swift pullback in sales. 

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