Washington (AFP) – U.S. home sales fell 1.9 percent in September after hitting a nearly four-year high in August as surging home prices put a crimp on demand, an industry group reported Monday.
Sales of previously owned homes dropped to an annual rate of 5.29 million in September from a downwardly revised 5.39 million in August, the National Association of Realtors (NAR) said.
Lawrence Yun, NAR chief economist, said the decline was expected. The September number was in line with analysts’ consensus estimate.
“Affordability has fallen to a five-year low as home price increases easily outpaced income growth,” Yun said. “Expected rising mortgage interest rates will further lower affordability in upcoming months.”
Mortgage rates have been on the rise since the Federal Reserve began signaling in May that it was planning to reduce its massive monetary stimulus this year.
Year-over-year, September existing-home sales were up 10.7 percent and remained above year-ago levels for the 27th month as the housing market slowly recovers from the 2006-2007 price crash.
The national median existing-home price was $199,200 in August, down 5 percent from August but up 11.7 percent from September 2012.
Yun predicted that next month’s October report may reflect home-buying delays associated with the October 1-16 government shutdown.