Existing homes sales remain high, but inventory is “historically low”

September sales for existing homes beat August’s 14-year record

Existing home sales rose again in September as listed inventory sunk to a new low. (iStock)
Existing home sales rose again in September as listed inventory sunk to a new low. (iStock)

Sales for previously owned homes surged for a fourth consecutive month, but the number of properties for sale sunk to a new low.

In September, 6.5 million homes sold, seasonally adjusted, according to the National Association of Realtors’ monthly report — a jump of 9.4 percent compared to August. Sales were also up 21 percent year-over-year.

While demand is high, supply is low: Existing housing inventory sank to a record low of 1.47 million, which would be sold within 2.7 months at the current sales rate.

September’s inventory is a 1.3 percent drop compared to August levels, and about 19 percent compared to September 2019.

The median sales price continued to climb, clocking in at more than $311,000. The median sales price for existing homes surpassed $300,000 for the first time in July.

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According to NAR, 71 percent of the 6.5 million homes sold were on the market for less than a month. About a third of September’s homebuyers were purchasing their first home, while 12 percent of buyers were snapping up a second home or investment property.

Lawrence Yun, NAR’s chief economist, said September’s surge in sales deviates from the typical dropoff that occurs at the start of fall. He attributed the difference in consumer behavior to low mortgage rates and “an abundance of buyers,” in part those looking for vacation homes now that working from home has become more prevalent.

Yun noted that low inventory continues to represent a significant headwind for the sales market.

“There is no shortage of hopeful, potential buyers, but inventory is historically low,” he said. “We have seen some homebuilders move to ramp up supply, but a need for even more production still exists.”