The long, hot summer for home buying is finally cooling down, and buyers should breathe a sigh of relief. After months of steadily rising prices, bidding wars, and offers over asking, existing-home prices are continuing to fall.
Prices hit a median $245,100 in September, sliding nearly 3.2% from August, according to the most recent National Association of Realtors® report. But prices for these previously lived-in abodes were still up 4.2% from a year ago.
“It’s interesting we haven’t seen listing prices come down just yet, ” says Chief Economist Danielle Hale of realtor.com®. This means that sellers may be listing their homes at higher prices, but buyers are buying less expensive properties. The annual pace of price increases is also starting to slow, which “suggests that buyers are hitting a wall with how many price increases they can continue to accept.”
Indeed, there were about 23% fewer existing homes listed at $250,000 and under in September than there were a year earlier, according to the report. However, there were 28.2% more in the $500,000-and-up price range.
However, prices typically drop in the fall, Hale says. The types of homes sold tend to be smaller, as families needing larger abodes are more likely to buy in the summer before the kids start school.
On the plus side for cash-strapped buyers is that existing homes are still cheaper than newly built residences—by nearly 22.5%. The median price of a newly constructed home was $300,200 in August, according to the most recent data available from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Existing-home sales nudged up 0.7% from August to September—but they were down 1.5% annually, according to the seasonally adjusted numbers in the report. That means they have been smoothed out over 12 months to account for seasonal fluctuations in the market.
“Sales activity likely would have been somewhat stronger if not for the fact that parts of Texas and South Florida—hit by Hurricanes Harvey and Irma—saw temporary, but notable declines,” NAR Chief Economist Lawrence Yun said in a statement.
The deadly wildfires in Northern California could affect the number of sales in the state as well in the coming months, Hale says.
That could be a challenge for many renters and homeowners, as the nation’s most expensive homes are in the West, with a median price of $362,700. That’s down 3.3% from August, but up 5% from September 2016. Monthly sales were up 3.3%, but flat annually.
In the Northeast, prices also dipped 3.9% from August to September, to reach $274,100. But they were up 4.8% year over year. Sales were the same in both August and September, but down 1.4% from the previous September.
Monthly prices fell nearly 2.6% in the South, to hit $215,100, but were up 4.6% annually. The number of sales dropped 0.9% month over month and tumbled 2.3% year over year. In the Midwest, median prices fell 2.9% from August, to reach $195,800, but rose 5.4% from last year. Monthly sales were up 1.6%, but down 1.5% annually.