Existing Home Sales declined in September

Wells Fargo Research Team Wells Fargo

Summary

Affordability challenges continue to weigh on the housing market

Scarce supply, high home prices and elevated mortgage rates continue to constrain housing activity. Total existing home sales declined 1.0% during September, falling short of expectations for a modest gain. The 3.84 million-unit pace hit during the month marks the slowest pace since 2010 in the aftermath of the housing bust and Great Recession.

The monthly fall occurred despite a drop in 30-year mortgage rates, which eased to nearly 6% in September alongside a pivot to less-restrictive monetary policy from the Federal Reserve. However, according to Mortgage New Daily, mortgage rates since have shot back up and are now closer to 7% amid new uncertainty on where the federal funds target rate will eventually settle. In addition to the recent leg-up in mortgage rates, the negative knock-on impacts of Hurricane Milton and Helene will likely weigh on residential activity in the near-term.

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Wells Fargo Research Team

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