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US existing home sales edged up marginally in the past month, rising 0.5% to an annualised pace of about 4.13 million units, indicating a stable but subdued housing market. Despite the monthly gain, sales remained lower than last year as high borrowing costs and economic uncertainty continued to weigh on buyer sentiment. Limited new listings and slower inventory growth kept supply tight, supporting home prices, which rose to a median of around USD 409,200. Mortgage rates stayed above 6%, affecting affordability, especially for first-time buyers. With homes taking longer to sell and cash buyers playing a larger role, the market showed steadiness rather than a clear recovery.
US existing home sales saw a marginal increase during the past month, signalling limited momentum in the housing market as borrowing costs remained elevated and broader economic conditions tempered buyer confidence. Sales volumes rose by 0.5% on a month-on-month basis to an annualised pace of about 4.13 million units, broadly in line with market expectations. Despite the monthly improvement, overall transactions were still around 1% lower compared to the same period last year. Advertisement
Market activity continued to be constrained by a slowdown in new listings, as many homeowners refrained from selling amid stable housing wealth levels and minimal distress-driven transactions. Inventory growth, which had shown stronger expansion earlier in the year, began to moderate. The total stock of existing homes stood at roughly 1.43 million units, representing a 7.5% increase on an annual basis. At the prevailing sales pace, this translated into a supply of just over four months, slightly higher than a year earlier.
Mortgage affordability remained a key challenge. While rates on 30-year fixed home loans had eased from earlier peaks, they continued to hover above the 6% mark, limiting purchasing power for many households. This pressure was compounded by signs of a cooling labour market, with unemployment rising to its highest level in more than four years and wage growth slowing to its weakest pace since mid-2021.
Home prices, however, maintained an upward trajectory. The median existing home price increased by around 1.2% from a year earlier to approximately USD 409,200, reflecting ongoing supply constraints in several regions. Properties also took longer to sell, with the median number of days on the market rising to 36, compared with 32 days a year earlier.
First-time buyers continued to face hurdles, accounting for about 30% of total transactions, a level that market observers consider insufficient for a robust and balanced housing market. Cash buyers played a larger role, making up roughly 27% of sales, while distressed transactions, including foreclosures, remained subdued at around 2% of total activity.
Overall, the US housing market during the past month showed signs of stability rather than recovery, with modest gains in sales volumes offset by affordability constraints, cautious consumer sentiment and slower inventory expansion.
Source - Reuters
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