According to a recent MReport and a National Association of Realtors report, existing home sales increased quite a bit in September. The median price that existing homes sold for in September was $311,800. This was 14% higher than the median price in September of 2019. The NAR’s report looked at the sales of existing single family homes, townhomes, condominiums, and co-ops. The report stated that roughly 7 in 10 homes sold in September were on the market for less than a month. The inventory of homes for sale fell 19% annually to only 1.47 million homes for sale at the end of September. At this pace, that represents a 2.7 month supply. This is the lowest it has been since 1982. All four of the major regions experienced month-over-month and year-over-year growth. The Northeast region had the largest growth in both categories. The seasonally adjusted annual rate of home sales increased by 9.4% from August to September. Foreclosures and short sales accounted for 1% of September sales. This was the same from August, but down from September 2019.
WHAT ELSE DID THE REPORT SAY?
NAR’s Chief Economist, Lawrence Yun, stated “Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season. I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home”. Yun also included that homebuilders have been increasing the supply in many areas. In addition, there has been an increased interest in second or vacation homes. The report stated that sales in vacation destination counties have accelerated since July. Yun also stated, “The uncertainty about when the pandemic will end coupled with the ability to work from home appears to have boosted sales in summer resort regions, including Lake Tahoe, mid-Atlantic beaches, and the Jersey shore areas”. Realtors.com’s Chief Economist Danielle Hale said that buyers’ biggest challenges remain “finding a suitable home amid very tight inventory, and qualifying for a mortgage within a framework of tightening credit availability”. She added that in many urban areas, rent prices are declining and are not driving buyers into the market. Low mortgage rates are encouraging buyers to purchase homes and secure a place of their own.
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