Housing interest rates are continuing to climb, with 30-year fixed mortgages approaching 7% in September. As a result, the housing market is experiencing a period of adjustment. According to Lawrence Yun, chief economist for the National Association of Realtors (NAR), “Expensive regions of the country are especially feeling the pinch and seeing larger declines in sales.”

Housing Supply
Adding to the pressure in many markets is a lack of affordable homes. At the end of September, there were 1.25 million units available for sale, down 2.3% from a month earlier and 0.8% from a year earlier. At the current sales pace, total housing inventory would supply the market for 3.2 months, unchanged from a month ago but an increase from the 2.4-month supply posted in September 2021.

A Different Market from 2008
Although sales are down, economists are not drawing comparisons to housing crises of the past. In fact, in markets with limited inventory, multiple offers are quite common, with more than 25% of all homes selling higher than list price. According to Yun, “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010 when inventory levels were four times higher than they are today.”

Home Prices Still High
Every sales region across the country posted price increases, as the national median existing-home price climbed 8.4% year over year. What’s more, year-over-year increases have occurred over the past 127 consecutive months, a new record. However, for the past three months, median price increases have softened; although, this is common in fall after summer price peaks.

Days on Market
On average, properties were available for 19 days in September; this is, however, up from 16 days a month ago and 17 days a year ago. Of all the homes sold in September, 70% were available for less than 30 days.

Who’s Buying?
First-time buyers accounted for 29% of all sales in September, unchanged from August and up from 28% in September 2021. According to the NAR “2021 Profile of Home Buyers and Sellers,” the annual share of first-time buyers was 34%. All-cash sales, meanwhile, accounted for 22% of all transactions, down from 24% a month ago and 23% a year ago. Individual investors and second-home buyers—two groups who account for most cash sales—represented 15% of the market, down from 16% in August but up from 13% in September 2021. Distressed sales, meanwhile, accounted for just 2% of all transactions.

Regional Breakdown

Northeast - Existing-home sales annual rate of 610,000; a decrease of 1.6% from August 2022 and 18.7% from September 2021. The median sales price of $418,500 increased 8.3% from September 2021.

Midwest - Existing-home sales annual rate of 1.14 million; a decrease of 1.7% from August 2022 and 19.7% from September 2021. The median sales price of $281,500 increased 6.9% from September 2021.

South - Existing-home sales annual rate of 2.08 million, a decrease of 1.9% from August 2022 and 23.8% from September 2021. The median sales price of $351,700 increased 11.8% from September 2021.

West - Existing-home sales annual rate of 880,000; unchanged from August 2022 but a decrease of 31.3% percent from September 2021. The median sales price of $595,400 increased 7.1% from September 2021.