Existing Homes Selling at Year's Fastest Pace

Existing home sales, which ended fourrnstraight months of gains with a 1.8 percent decline in August, bounced back inrnSeptember the National Association of Realtors® (NAR) said today. Salesrnincreased 2.4 percent to a seasonally adjusted annual rate of 5.17 millionrnhomes, the highest pace of the year, from the August rate of 5.05 million. </p

Despite the recovery, sales in Septemberrnare still 1.7 percent lower than in September 2013.  Existing homes were selling then at a rate ofrn5.26 million.  </p

Sales of single family homes rose 2.0rnpercent to an annual rate of 4.56 million from 4.47 million in August but werern1.9 percent below the annual rate of 4.65 million units a year earlier.  Existing condo and cooperative units sold atrna 5.2 percent higher rate than in August, 610,000 units compared to 580,000,rnbut were unchanged from September 2013.  </p

Lawrence Yun, NAR chief economist, says the improved demand for buying seenrnsince the spring has carried into the fall. “Low interest rates and price gainsrnholding steady led to September’s healthy increase, even with investor activityrnremaining on par with last month’s marked decline,” he said. “Traditionalrnbuyers are entering a less competitive market with fewer investors searchingrnfor available homes, but may also face a slight decline in choices due to thernfact that inventory generally falls heading into the winter.”</p

The median existing-home price for all existing home sales in September was<b$209,700, which is 5.6 percent above September 2013 and marks the 31^{st</supconsecutive month of annual price gains. The median existing single-family homernprice was $210,300 in September, up 5.9 percent from September 2013 and existingrncondos sold for a median of $205,200 in September, 3.2 percent higher than arnyear ago.</p}

According to Freddie Mac, the average mortgage interest rate for a 30-year,rnconventional, fixed-rate mortgage rose to 4.16 percent in September from 4.12rnpercent in August. Despite the slight increase, interest rates are 33 basisrnpoints less than a year ago (4.49 percent). </p

All-cash sales were 24 percent of transactions in September, up slightlyrnfrom August (23 percent) but down from 33 percent in September of last year.rnIndividual investors, who account for many cash sales, purchased 14 percent ofrnhomes in September compared to 12 percent last month and 19 percent in Septemberrn2013. Sixty-three percent of investors paid cash in September.  </p

“Economic instability overseas is leading to volatility in the stock marketrnand is causing investors to seek safer bets, which will likely keep interestrnrates in upcoming weeks hovering near or below where they are now,” said Yun.rn”This is welcoming news for consumers looking to buy, although they couldrntemporarily become more cautious by less certain economic conditions.”  </p

The percent share of first-time buyers continues to underperformrnhistorically, remaining at 29 percent for the third consecutive month.rnFirst-time buyers have represented less than 30 percent of all buyers in 17 ofrnthe past 18 months.</p

Seven percent of September sales were foreclosures and 3 percent were shortrnsales.  Total distressed sales made up 8rnpercent of the market in August and 14 percent one year ago.  Foreclosures sold for an average discount ofrn14 percent below market value in September, unchanged from August, while shortrnsale discounts increased to 14 percent from 10 percent.  </p

The gradually diminishing role of distressed sales is good news for appraisersrnaccording to NAR President Steve Brown who said they have faced undue pressurernsince the downturn.  “An appraisal is anrnimportant part of the home buying and selling process,” he said. “Withrnforeclosures and short sales falling closer to average levels, appraisers willrnhave fewer distressed sales in their list of comparables when determining homernvaluations.”</p

Total housing inventory at the end of September fell 1.3 percent to 2.30rnmillion existing homes, a 5.3-month supply at the current sales pace. Despiternfewer homes for sale in September, unsold inventory is still 6.0 percent higherrnthan a year ago, when there were 2.17 million existing homes on the market. </p

The typical property was on the market for 56 days in September compared torn53 days in August and 50 days in September of last year.  Short sales took a median of 116 days to sellrnwhile foreclosures and non-distressed homes sold in 59 and 55 daysrnrespectively.  Thirty-five percent ofrnhomes sold in September were on the market for less than a month.</p

All major regions except for the Midwest experienced gains in September.  Sales in the Northeast climbed 1.5 percent tornan annual rate of 680,000, but remain 1.4 percent below a year ago. The medianrnprice in the Northeast was $249,800, which is 4.8 percent higher than a yearrnago.</p

In the Midwest, existing-home sales declined 5.6 percent month-over-month tornan annual level of 1.17 million and remain 4.9 percent below September 2013.rnThe median price in the Midwest was $165,100, up 4.9 percent from a year ago.</p

Existing-home sales in the South increased 5.0 percent to 2.12 million, andrnare now 1.4 percent above September 2013. The median price in the South wasrn$180,900, up 5.1 percent from a year ago.</p

Existing-home sales in the West jumped 7.1 percent to an annual rate of 1.20rnmillion in September, but remain 4.0 percent below a year ago. The median pricernin the West was $294,200, which is 4.0 percent above September 2013.

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