Fact Checked

Existing-home sales hit 3-year low in September

House with for sale sign in front yardImage: House with for sale sign in front yard
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The housing market is in a slump amid rising mortgage interest rates.

The number of sales of existing homes declined in September for the sixth consecutive month to 5.15 million, according to a report released Friday by the National Association of Realtors. This is the lowest level of existing-home sales  since November 2015.

From August to September, existing-home sales fell 3.4% and are down 4.1% compared with the same period a year ago. In addition, the average home sold in September was on the market for 32 days, three days longer than it took to sell a home in August.

The National Association of Realtors pointed to surging home prices and rising interest rates as two reasons for the downward trend in sales.

The median existing-home price increased by 4.2% — a little more than $10,000 — compared with September 2017 to $258,100. And interest rates have jumped about two-thirds of a percentage point to 4.63% since last year, which has been “preventing consumers from making quick decisions on home purchases,” according to Lawrence Yun, chief economist at the National Association of Realtors.

The current climate makes it particularly challenging for first-time homebuyers to enter the market, Yun said. But he also noted “consistent job gains could allow more Americans to enter the market with a steady and measurable rise in inventory.”

President Trump’s tax overhaul may also be contributing to the decline in home sales, according to The Wall Street Journal. The tax bill puts new limits on the amount of mortgage interest that can be deducted from a homeowner’s federal income taxes, reducing an incentive to buy a home.

Meanwhile, a Bloomberg report suggests recent hurricanes may have depressed home sales in the South.

About the author: Tim Devaney is a personal finance writer and credit card expert at Credit Karma. He’s a longtime journalist who prides himself on being a good storyteller who can explain complex information in an easily digestible wa… Read more.