Although existing-home sales were down in September from August’s pace, sales were 11.3% higher than last September. Total existing-home sales dropped 3% to an annualized pace of 4.91 million in September, according to National Association of Realtors.

Lawrence Yun, NAR chief economist, said the market has been stable although at low levels, and there is plenty of room for improvement. “Existing-home sales have bounced around this year, staying relatively close to the current level in most months,” he said. “The irony is affordability conditions have improved to historic highs and more creditworthy borrowers are trying to purchase homes, but the share of contract failures is double the level of September 2010. Even so, the volume of successful buyers is higher than a year ago and is remaining fairly stable – this speaks to an unfulfilled demand.”

Interest rates are down even as contract failures were 18%, the same as August.

All-cash sales increased 1% from August to 30% with investors buying the bulk of these. First-time buyers are staying steady at 32%, the same as August 2011 and September 2010.

The national median home price fell 3.5% to $165,400 in September, while distressed homes accounted for 30% of overall sales.

Inventory at the end of September was down 2% to 3.48 million existing homes for sale, an 8.5-month supply at the current sales pace.

Single-family home sales dropped 3.6% to an annual rate of 4.33 million in September with median prices down 3.9% from last year to $165,600 in September.

Condominium and co-op sales rose 1.8% in September.

Northeast sales were the only region with an increase, posting a 2.6% rise for September. Midwest sales slipped 0.9% while the South’s sales dropped 2.6%. Sales in the West fared the worst with an 8.8% decline in September from August.

Source: National Association of Realtors