By the end of September, there were 1.83 million homes available for sale; this figure is unchanged from a month earlier but is 2.7% lower than the 1.88 million homes that were available a year ago. At the current sales pace, it would take only 4.1 months to sell the current supply of homes, up from four months in August but down from 4.4 months in September 2018. The average home remained available for sale for 32 days, unchanged from a year ago but a day longer than a month ago. Of all the homes sold in September, 49% were available for less than a month.

Equity Gains
This lack of inventory is leading to an increase in home prices. In September, the median existing-home price climbed 5.9% year over year to $272,100. Every major sales region recorded price increases. What's more, September marked the 91st consecutive month of year-over-year price gains. This combination of lack of inventory and increasing home prices is leading to a decline in home sales. After two months of increases, existing-home sales declined in September. While every sales region in the country reported declines, no area was as hard hit as the Midwest. According to Lawrence Yun, chief economist for the National Association of Realtors, "We must continue to beat the drum for more inventory." Yun has been calling for an increase in new home construction for the past year, which should be enough to alleviate the pains associated with the housing shortage.

Foot Traffic
Despite the climbing home prices, buyers still see the potential in the housing market. Mortgage rates are currently under 4%, an attractive incentive for would-be buyers. And according to Yun, "The rise in foot traffic, as evidenced by the open rates of SentriLock key boxes, shows growing buyer interest." Some of this increased foot traffic is coming from first-time buyers. This group accounted for 33% of all home sales in September; this is up 2% month over month and 1% year over year. According to NAR's "2018 Profile of Home Buyers and Sellers," first-time buyers made up 33% of the buying public in 2018. However, the high prices might be discouraging individual investors and second-home buyers from entering the market; these two groups typically purchase homes using cash. These groups accounted for 14% of all home purchases in September, unchanged from August but down 2% from a year earlier. Of all transactions in September, 17% were all-cash sales. In comparison, these types of transactions accounted for 19% and 21% of all sales in August 2019 and September 2018, respectively.

Regional Breakdown

Northeast - Existing-home sales annual rate of 690,000; a decrease of 2.8% from August 2019 but an increase of 1.5% from September 2018. Median prices increased 5.2% from September 2018.

Midwest - Existing-home sales annual rate of 1.27 million; a decrease of 3.1% from August 2019 but relatively unchanged from a year ago. Median prices increased 7.2% from September 2018. 

South - Existing-home sales annual rate of 2.28 million; a decrease of 2.1% from August 2019 but an increase of 6% from September 2018. Median prices increased 6.3% from September 2018. 

West - Existing-home sales annual rate of 1.14 million; a decrease of 0.9% from August 2019 but an increase of 5.6% from September 2018. Median prices increased 4.5% from September 2018.