Existing-Home Sales Down 2.2% in September but Up 3.9% YOY
Washington, DC, October 22, 2019-Total existing-home sales fell 2.2% from August to a seasonally adjusted annual rate of 5.38 million in September, according to the National Association of Realtors.
Despite the decline, overall sales are up 3.9% from a year ago (5.18 million in September 2018).
Lawrence Yun, NAR’s chief economist, said that despite historically low mortgage rates, sales have not commensurately increased, in part due to a low level of new housing options. “We must continue to beat the drum for more inventory,” said Yun, who has called for additional home construction for over a year. “Home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential.”
The median existing-home price for all housing types in September was $272,100, up 5.9% from September 2018 ($256,900), as prices rose in all regions. September’s price increase marks 91 straight months of year-over-year gains.
Total housing inventory at the end of September sat at 1.83 million, approximately equal to the amount of existing-homes available for sale in August, but a 2.7% decrease from 1.88 million one year ago. Unsold inventory is at a 4.1-month supply at the current sales pace, up from 4.0 months in August and down from the 4.4-month figure recorded in September 2018.
Properties typically remained on the market for 32 days in September, up from 31 days in August and even with September 2018. Forty-nine percent of homes sold in September 2019 were on the market for less than a month.
First-time buyers were responsible for 33% of sales in September, up from 31% in August and 32% recorded in September 2018. NAR’s 2018 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 33%.
As the share of first-time buyers rose, individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in September 2019, unchanged from August but down from 16% recorded last September. All-cash sales accounted for 17% of transactions in September, down from 19% in August and 21% in September 2018.
Distressed sales-foreclosures and short sales-represented 2% of sales in September, unchanged from August but down from 3% in September 2018.
“For families on the sidelines thinking about buying a home, current rates are making the climate extremely favorable in markets across the country,” said NAR President John Smaby, a second-generation Realtor from Edina, Minnesota, and broker at Edina Realty. “These traditionally low rates make it that much easier to qualify for a mortgage, and they also open up various housing selections to buyers everywhere.”