U.S. Existing Home Prices Continue to Rise

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The national median price for existing homes in the U.S. reached $199,200 in September, an 11.7 percent increase from the same month a year earlier and the 10th consecutive month of double-digit yearly increases, according to National Association of Realtors data released today.

Existing home sales -- completed transactions for single-family homes, townhomes, condominiums and co-ops -- reached 5.29 million in September, dropping from a revised 5.39 million in August, but were 10.7 percent higher than last year, according to NAR. 

The number of U.S. existing homes sold in September fell 1.9 percent from the previous month, after reaching a four-year high in August, while limited housing inventory increased home prices throughout the country.

Homes sales have remained above year-ago level for 27 consecutive months, NAR reports. 

The association expected the monthly sales decline in September, as home prices and mortgage rates continue climbing. 

"Affordability has fallen to a five-year low as home price increases easily outpaced income growth," Lawrence Yun, NAR chief economist, said in the report. "Expected rising mortgage interest rates will further lower affordability in upcoming months.  

Foreclosures and short sales accounted for 14 percent of all sales activity in September, up from 12 percent the previous month. Meanwhile, first-time buyers remained at 28 percent of the market in September, down from 32 percent last year. 

All-cash purchases represented 33 percent of activity in September, up from 32 percent in August, with individual investors comprising 19 percent of home sales. 

Last week, U.S. purchase loans dropped 5 percent, showing early signs of the impact of the recent government shutdown. Next month, NAR expects to see further repercussions.

"Just one impact of the recent government shutdown - delays in tax transcripts needed for approval of mortgage loans - put a monkey wrench in the transaction process and could negatively impact sales closings in next month's report," NAR president Gary Thomas said in the release.