Home sales in the United States surged in September with their strongest performance since January, ending a long period of months when housing market activity slowed from its breakneck pace and high prices rose. squeezed out many buyers.
Lower mortgage rates in late summer and the continued search for more space to work from home have boosted demand, housing analysts said. Sales were particularly strong at the high end, helped by a booming stock market.
Overall, existing home sales rose 7% in September from the previous month to a seasonally adjusted annual rate of 6.29 million, the National Association of Realtors said Thursday.
But near-record high prices in the United States have made it harder for first-time buyers to compete.
Even the slightly slower pace of home sales in the previous months still looked warm by historical standards. Demand from homebuyers has exceeded supply for more than a year, but economists said the past month has always been remarkable.
âThis fall season appears to be one of the best fall home selling seasons in 15 years,â said Lawrence Yun, chief economist of NAR.
Homes in fast growing metropolitan areas continue to move quickly. Caroline Blake has decided to list her house in Charleston, SC this month because house prices are so high and she doesn’t need as much space now that her kids are there. ‘university.
âI just thought, ‘I’ll try,’â Ms. Blake said. âThe market is so strongâ¦ I think the timing was right. “
Ms. Blake listed her house for $ 1.15 million. She received two offers and accepted a full price offer within days.
Home mortgage applications rose 8% in September, according to the Mortgage Bankers Association, suggesting home sales may continue to rise in the coming months. But the average rate on a 30-year fixed-rate mortgage has gone up, says Freddie Mac,
which could deter some buyers. Homes typically contract a month or two before the contract closes, so September’s numbers largely reflect buying decisions made in August or July when rates were lower.
Cash buyers also play an important role. About 23% of existing home sales in September were bought in cash, up from 18% a year earlier, NAR said.
Many homes sell for above the listing price. The typical home sold in September was on the market for 17 days, unchanged from the previous month, NAR said.
âThe demand for housing remains really, really strong, and I don’t see the supply easing anytime soon,â said Leslie Turner of Maison Real Estate in Charleston.
At the current pace of sales, the housing supply in the market was 2.4 months at the end of September, the lowest level since April.
Kasey Soska and Jessie Neal moved from Chicago to Pittsburgh this year with the intention of buying their first home.
âWe loved the city [in Chicago], but also it was totally untenable to own anything other than a small condo, âsaid Mr. Soska. âEspecially with the pandemic and being inside a lot, we were like, ‘We really need the space. “”
The couple spent months looking for a home, but struggled to find homes they liked within their budget. They finally bought a three bedroom house in September for around $ 190,000. âWe just walk around saying, ‘How lucky are we to have this house? â, Said Mr. Soska.
Others were less fortunate. The market share of first-time buyers has fallen to 28%, its lowest level since July 2015. Fierce competition has pushed up house prices sharply and excluded a number of people from the market. While sales rose for homes priced above $ 250,000 in September, the number of deals fell below that price, NAR said.
âPrice increases crowd out first-time buyers,â NAR’s Mr. Yun said.
Although prices remain near record highs, the pace of price growth is slowing. The median price of existing homes rose 13.3% in September from the previous year, NAR said, to $ 352,800. This compares to a 15.2% increase the month before. Price cuts are also increasingly common. Almost 15% of listings lowered their prices in September, down from 7.9% in April, according to Zillow Group Inc.
Construction activity has increased due to strong demand, but home builders are facing significant delays and labor shortages. Housing starts, a measure of US home construction, fell 1.6% in September from August, the Commerce Department said this week. Residential permits, which can be an indicator for future home construction, fell 7.7%.
owner of The Wall Street Journal, also operates Realtor.com under license from NAR.
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