Existing home sales (closings) rose 3.2 percent in September, according to the National Association of Realtors (NAR), which notes that sales are at their highest pace since June and are 0.6 above a year ago.
Lawrence Yun, NAR chief economist, says the two-month slump in existing sales reversed course convincingly in September.
“The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale,” he said.
“Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time homeowners to buy last month,” Yun added.
Of the same data, Dr. Ralph McLaughlin noted, “Existing home sales bucked a two-month slide in September, as homebuyers respond to slightly more inventory compared to last month. Still, existing home sales are 16% below their pre-recession average.”
Inventory remains “extremely tight”
Inventory levels rose 1.5 percent in September but are down 6.8 percent compared to a year ago, falling (tightenint) for 16 consecutive months.
“Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in,” added Yun. “Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”
The median existing-home price rose 5.6 percent over the last year, hitting $234,200 and the average days on market was 39 days in September (down three days from August, and 10 days from a year ago). First-time buyers represented 34 percent of sales in September (a much needed, albeit slight increase).
Yun says the conditions of improving job gains and affordable mortgage rates “are there for the steady rise in first-timers needed to finally reverse the decline in the homeownership rate.”
McLaughlin notes, “If home sales are to drive up to their pre-recession levels, we’ll need to see inventory continue to pick up. While September’s increase from August is good news for homebuyers, inventory still fell 6.8% over the past year.”
Sales jumped the most in the Northeast
Existing home sales in September were varied, based on region:
- In the Northeast, sales rose 5.7 percent, unchanged from a year ago. The median price was $261,600, up 2.1 percent from September 2015.
- In the Midwest, sales rose 3.9, up 2.3 percent from a year ago. The median price was $184,500, up 5.9 percent from September 2015.
- In the South, sales rose 0.9, down 0.9 percent from a year ago. The median price was $204,000, up 6.6 percent from September 2015.
- In the West, sales rose 5.0, up 1.6 percent from a year ago. The median price was $345,500, up 8.1 percent from September 2015.
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