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Existing-home sales rebound in September

Inventory continues to remain stubbornly low

Existing-home sales rose 7.0% in September after waning in August, according to a new report National Association of Realtors released Thursday. Despite this increase, sales of existing homes are still down 2.3% from a year ago.

“The gain in existing home-sales in September reflects contracts signed earlier in the summer,” Mike Fratantoni, MBA SVP and chief economist said in a statement. “MBA’s purchase application data showed an 8% gain in September, which is evidence of growing demand for buying a home and supports further sales increases in the months ahead.”

Year-over-year, inventory of unsold homes decreased 13% in September to 1.27 million. This is equivalent to 2.4 months of supply at the current monthly sale pace, a 7.7% decrease from August 2021.

“Some improvement in supply during prior months helped nudge up sales in September,” Lawrence Yun, NAR’s chief economist, said in a statement. “Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year.”

With builder confidence increasing for the second month in a row in October and housing starts at least staying steady, inventory is expected to start increasing in the coming months.

“MBA expects new home construction to help support growing inventory levels as we enter 2022, which will lead to a deceleration in home-price growth,” Frantantoni said in a statement.

The median existing-home sales price rose again in September to $352,800, a 13.3% increase from a year prior. This is the 115 straight month of year-over-year median sale price increases.

Of the homes sold in September, 86% were on the market for less than a month, with properties typically remaining on the market for 17 days, which is the same as August, according to the NAR.

The share of first-time homebuyers dropped to 28% in September, down from 29% in August. NAR’s 2020 profile of home buyers and sellers found that the annual share of first-time buyers was 31%.

“First-time buyers are hit particularly hard by the historically high home prices as they largely do not have the savings required to buy a home or equity to offset such a purchase,” Yun said in a statement.

When broken down by type, sales of existing single-family homes were up 7.7% in September as compared to August and down 3.1% from a year prior. Condominium and co-op sales, however, were up only 1.4% from August, but year-over-year, they were up 4.5%.

Regionally, all four of the major U.S. regions saw month-over-month increases in existing-home sales in September, with South seeing the greatest increases at 8.6% and the Midwest showing the smallest increase at 5.1%. Year-over-Year, the South showed no change in number of sales, while the other three regions saw decreases, with the Northeast showing the largest decrease at 8.3%.

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