Home prices declined on a month-to-month basis in September, dropping 4% to a median price of $209,700. Year-over-year prices increased 5.6%, continuing the year's pattern of a more sustainable price growth path. The recent drop in interest rates, however, could put some increased pressure on prices, leading to a return of year-over-year gains above 6%.
The seasonally adjusted annualized rate of home sales reached 5.17 million homes in September, its highest pace so far this year. The pace of sales increased 2.4% above last month's sales pace, but was still 1.7% below the same month of the previous month. The continuing accommodative interest rates will likely continue to support strong sales in the near future.
The number of homes available increased 6% compared to the same month of the previous year, with 2.3 million homes available for sale in September. This translated to 5.3 months supply, with the increase in the pace of sales creating a tightening in inventory conditions. As we move into the cooler months of the year, we will likely begin to see inventory tighten slightly.
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