Existing-Home Sales Surge 7.0% Higher in September
While the inventory of for-sale homes is down 13% year-to-year, NAR Economist Yun credits a boost in supply for the increase, and buyers’ fears of rising interest rates.
WASHINGTON – Existing-home sales rebounded in September after waning in August, according to the National Association of Realtors® (NAR). Each of the four major U.S. regions tracked in the study increased on a month-over-month basis. Year-over-year, one region held steady while three others reported a decline in sales.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – rose 7.0% from August to a seasonally adjusted annual rate of 6.29 million in September. However, sales decreased 2.3% from a year ago (6.44 million in September 2020).
“Some improvement in supply during prior months helped nudge up sales in September,” says Lawrence Yun, NAR’s chief economist. “Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year.”
Total housing inventory at the end of September was 1.27 million units, down 0.8% from August and down 13.0% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the present sales pace, down 7.7% from August and down from 2.7 months in September 2020.
The median existing-home price for all housing types in September was $352,800, up 13.3% from September 2020 ($311,500), and prices rose in each of the four regions in the study. It’s the 115th straight month of year-over-year price increases.
“As mortgage forbearance programs end, and as homebuilders ramp up production – despite the supply-chain material issues – we are likely to see more homes on the market as soon as 2022,” says Yun.
Properties typically remained on the market for 17 days in September, unchanged from August and down from 21 days in September 2020: 86% of September homes sold were on the market for less than a month.
First-time buyers accounted for 28% of sales in September, down from 29% in August and 31% one year earlier.
“First-time buyers are hit particularly hard by the historically high home prices, as they largely do not have the savings required to buy a home or equity to offset such a purchase,” says Yun.
Individual investors or second-home buyers purchased 13% of homes in September, down from 15% in August but up from 12% in September 2020. All-cash sales accounted for 23% of transactions in September, up from 22% in August and 18% in September 2020.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in September, which was unchanged both month-to-month and year-to-year.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.90 in September, up from 2.84% in August. The average commitment rate across all of 2020 was 3.11%.
Single-family and condo/co-op sales: Single-family home sales decreased to a seasonally adjusted annual rate of 5.59 million in September, up 7.7% from 5.19 million in August but down 3.1% from one year ago. The median existing single-family home price was $359,700 in September, up 13.8% from September 2020.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 700,000 units in September, up 1.4% from 690,000 in August and up 4.5% from one year ago. The median existing condo price was $297,900 in September, an annual increase of 9.3%.
Regional breakdown: Existing-home sales in the Northeast grew 5.5% in September, for an annual rate of 770,000, an 8.3% decrease from September 2020. The median price in the was $387,200, up 9.2% from one year ago.
Existing-home sales in the Midwest rose 5.1% to an annual rate of 1,440,000 in September, a 2.7% drop from one year earlier. The median price in the Midwest was $265,300, a 9.1% increase from September 2020.
Existing-home sales in the South jumped 8.6% in September, for an annual rate of 2,770,000 that’s unchanged year-to-year. The median price in the South was $307,500, a 14.8% rise from one year ago.
Existing-home sales in the West climbed 6.5% at an annual rate of 1,310,000 in September, down 3.0% from one year ago. The median price in the West was $506,300, up 8.3% from September 2020.