September Existing Home Sales Push Forward
Existing home sales rebounded strongly in September, posting their 12th consecutive year over year gain, the National Association of Realtors reported yesterday.
NAR said total existing home sales increased by 4.7 percent to 5.55 million, seasonally adjusted annually, in September from a slightly downwardly revised 5.30 million in August, and are now 8.8 percent above a year ago (5.10 million).
Single-family home sales rose by 5.3 percent to 4.93 million in September from 4.68 million in August and improved by 9.6 percent from a year ago (4.50 million). The median existing single-family home price rose to $223,500 in September, up 6.6 percent from a year ago.
Existing condominium and co-op sales held steady at 620,000 units in September and rose by 3.3 percent from a year ago (600,000). The median existing condo price rose $209,200 in September, 1.9 percent above a year ago.
All regions saw gains. In the Northeast, sales jumped by 8.6 percent to 760,000 and are 11.8 percent above a year ago. The median price rose to $256,500, 4.0 percent above a year ago. In the Midwest, sales climbed by 2.3 percent to 1.31 million and are 12.0 percent above a year ago. The median price rose by 5.4 percent to $174,400 from a year ago.
Sales in the South rose by 3.8 percent to 2.21 million in September and by 5.7 percent from a year ago. The median price in the South rose by 6.2 percent to $191,500. Sales in the West increased by 6.7 percent to 1.27 million and by 9.5 percent from a year ago. The median price rose by 8 percent to $318,100.
Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. said the increase likely occurred in anticipation of new rules by the Consumer Financial Protection Bureau to give consumers more time to review closing documents.
“We expect the number of days on market will increase further in the coming months,” Vitner said.
NAR Chief Economist Lawrence Yun, NAR chief economist said a slight moderation in home prices in some markets and mortgage rates remaining below 4 percent gave more households the confidence to close on a home last month. “While current price growth around 6 percent is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace,” he said.
The median existing home price for all housing types in September was $221,900, 6.1 percent higher from a year ago ($209,100). September’s price increase marks the 43rd consecutive month of year-over-year gains. Total housing inventory at the end of September decreased by 2.6 percent to 2.21 million and was 3.1 percent lower than a year ago (2.28 million). Unsold inventory is at a 4.8-month supply at the current sales pace, down from 5.1 months in August.
“Lower inventories are keeping many first-time home buyers on the sidelines,” Vitner said.
The report said first-time buyers fell to 29 percent of sales in September after climbing to their highest share of the year in August (32 percent). A year ago, first-time buyers represented 29 percent of all buyers. All-cash sales rose to 24 percent of transactions in September (22 percent in August) and are unchanged from a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in September, up from 12 percent in August but down from 14 percent a year ago. Sixty-seven percent of investors paid cash in September.
NAR said properties typically stayed on the market for 49 days in September, an increase from 47 days in August but below the 56 days a year ago. Short sales were on the market the longest at a median of 135 days in September, while foreclosures sold in 57 days and non-distressed homes took 48 days. Thirty-eight percent of homes sold in September were on the market for less than a month.
Distressed sales remained at 7 percent in September for the third consecutive month; they were 10 percent a year ago. Six percent of September sales were foreclosures, while 1 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in September (18 percent in August), while short sales were discounted 19 percent (12 percent in August).
