NAR: Existing-Home Sales Up 2.4% In September

Posted by Patrick Barnard on October 23, 2014 No Comments
Categories : Residential Mortgage

Existing-home sales – including sales of condominiums and town houses – increased from a seasonally adjusted annual rate of 5.17 million in September, up 2.4% compared to the 5.05 million home sales recorded in August, according to the National Association of Realtors (NAR).

As reported last month, existing-home sales in August were down 1% compared to July.

Although sales in September reached their highest pace so far this year, they remained 1.7% below the 5.26 million units sold in September 2013.

The median existing-home price for all housing types in September was $209,700, an increase of 5.6% compared to September 2013.

Single-family home sales reached a seasonally adjusted annual rate of 4.56 million in September, up 2% from the 4.47 million recorded in August, but down 1.9% compared to the 4.65 million pace seen in September 2013.

The median single-family, existing-home price was $210,300, up 5.9% from September 2013.

Sales of existing condominiums and townhouses reached a seasonally adjusted annual rate of 610,000 units in September – up 5.2% compared to the 580,000 in August, but unchanged from the 610,000 unit pace a year ago.

The median existing-condo price was $205,200, up 3.2% from a year earlier.

Regionally, existing-home sales increased 7.1% in the West, 5% in the South and 1.5% in the Northeast; however, sales were down 5.6% in the Midwest.

All-cash sales represented 24% of all transactions in September, up slightly from August when they were 23% of all sales, but down from 33% in September of last year.

Individual investors, who account for a majority of cash sales, purchased 14% of homes in September, up from 12% in August but down from 19% in September 2013. About 63% of investors paid cash in September.

About 29% of all September sales were to first-time home buyers – a figure that has held for the past three months. Prior to the Great Recession, first-time home buyers represented around 40% of all existing-home sales.

About 10% of all sales in September were distressed sales (about 7% foreclosure sales and about 3% short sales) – up from 8% in August, but down 14% from a year ago.

Low mortgage interest rates helped drive the modest increase in existing-home sales. The average rate for a traditional 30-year, fixed-rate mortgage in September averaged around 4.16%.

‘Low interest rates and price gains holding steady led to September's healthy increase, even with investor activity remaining on par with last month's marked decline,’ says Lawrence Yun, chief economist for NAR, in a release. ‘Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline in choices due to the fact that inventory generally falls heading into the winter.’

‘Economic instability overseas is leading to volatility in the stock market and is causing investors to seek safer bets, which will likely keep interest rates in upcoming weeks hovering near or below where they are now,’ adds Yun. ‘This is welcoming news for consumers looking to buy, although they could temporarily become more cautious by less certain economic conditions.’

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