Housing Unaffordability Stifles Home Sales in September

The housing market continued its downward spiral in September as existing home sales plummeted to their lowest level since 2010, slipping 1% from August to a seasonally adjusted annual rate of 3.84 million per the National Association of Realtors. This decline, primarily driven by persistent affordability challenges, has left potential homebuyers on the sidelines despite recent efforts by the Federal Reserve to ease mortgage rates. 

“Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months,” per a statement made by NAR chief economist Lawrence Yun.

Despite a modest decrease in mortgage rates, the overall cost of homeownership remains a significant barrier for many. The median home price reached a new high of $404,500 in September, outpacing wage growth and further exacerbating affordability issues. Consequently, first-time homebuyers, already struggling to enter the market, have seen their share of sales dwindle to an all-time low.

The combination of high home prices and elevated mortgage rates has created a perfect storm of unaffordability, discouraging potential buyers from making the leap. As a result, the housing market has been stuck in a state of stagnation for the past year, with sales hovering around the four-million-unit mark.

While the Federal Reserve's rate cut has provided some relief, it has not been enough to overcome the fundamental affordability challenges facing the market. Many potential buyers remain hesitant to commit to a major purchase in the face of economic uncertainty and rising costs.

Unless there is a significant improvement in affordability, the housing market is likely to remain sluggish in the coming months. Pricing property to move and increasing its visibility by listing it everywhere, such as on KairosNewVentures.com may improve saleability.