U.S. Existing Home Sales Remain Flat in September Amid labor Market Uncertainty
washington D.C. – teh U.S. pending home sales index remained unchanged in September, halting a recent trend of modest gains, according to data released today. The stagnation raises concerns that anxieties surrounding the labor market might potentially be impacting potential homebuyers.
The flat reading follows a revised 1.2% increase in August, according to the National Association of Realtors (NAR). While mortgage rates are trending toward a three-year low, potentially easing affordability, the possibility of a government shutdown and broader economic uncertainties appear to be weighing on buyer confidence.
“The housing market is showing signs of gradual recovery after years of stagnation, but is sensitive to the overall economic trend,” said NAR Chief Economist Lawrence Yun in a statement. “Mortgage rates are heading toward a three-year low, which will further ease the burden of purchasing a home. However, the government shutdown may temporarily slow home sales.”
Despite the September pause, experts note positive developments including stabilizing mortgage interest rates – now below 6.5% – and a leveling off of housing prices. The “lock-in effect,” where homeowners are reluctant to sell due to historically low interest rates on their existing mortgages, is also beginning to ease, contributing to a modest increase in housing inventory.
Recent data from the S&P CoreLogic/Case-Shiller U.S. Home Price Index indicates a shift in favor of buyers. Nationwide home prices rose 1.5% year-on-year in August, the slowest increase recorded since mid-2023.
Regional performance varied in September. Sales completion indexes rose in the South, reaching the highest level since March, and in the Northeast. However,sales declined in both the West and Midwest.
Meanwhile,the new construction market is demonstrating stronger momentum. Home sales surged in August to the highest level since 2022,driven in part by price cuts and sales incentives offered by home builders.
Pending home sales contracts typically close one to two months after signing, making the index a leading indicator for the existing home market.
