Existing home sales decreased in September, with rising mortgage rates as the key culprit behind the the eighth straight month of decline.
Home sales sunk 1.5 percent last month from August to a seasonally adjusted rate of 4.71 million, according to the National Association of Realtors. The figure marked a 23.8 percent drop year over year.
The median home price in September rose 8.4 percent year over year to $384,000.
The market’s continued contraction is in reaction to the Federal Reserve’s interest rate hikes, which preceded a spike in mortgage rates. The 30-year fixed mortgage rate surpassed 6 percent last month for the first time since 2008.
Lawrence Yun, chief economist at NAR, said the report signaled an ongoing “adjustment” in the housing market as mortgage rates approach 7 percent and applications fell to a level last seen in 1997.
Yun noted that the country’s pricier markets are feeling the greatest pinch. The west was the only of the country’s four regions that did not see a decline in existing home sales last month, while the south saw the largest drop of nearly 2 percent.
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Although the median home price dropped from last month, it rose year-over-year by 8.4 percent. It was the 127th month in a row prices increased annually, the longest-running increase streak on record.
Dwindling housing supply — down 2.3 percent from August — is also driving sales down, and prices up. It doesn’t look like increased inventory is on the horizon, with homebuilder sentiment continuing its downward trend last month.
“We are not yet at the bottom,” Yun told reporters in comments reported by the Wall Street Journal, saying the monthly report trails behind current mortgage rates.