For the better part of the pandemic season, the housing market has been bubbling with activities. The housing stock in the market has not been able to meet the growing demand for houses amid the pandemic. Most housing market indicators have been pointing in the same direction, proving that the housing market is growing. In September, market indicators revealed a steady growth in housing sales. The existing home sales report for September by NAR has been released recently. Let’s have a look at what’s inside.
According to the report, existing-home sales inclined in September, for the fourth month consecutively. The total existing-home sales grew by 9.4% in September from August to a seasonally adjusted annual rate of 6.54 million. The September growth represents a 20.9% year-over-year growth (5.41 million in September 2019).
The September existing-home sales growth comes when it’s usual for home sales to decline towards the end of the year. “Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” Lawrence Yun, NAR chief economist, said in the report. The MarketWatch had earlier projected existing-home sales would grow to a median rate of 6.36 million in September.
Moreover, the median existing-home sales price for all types of houses in September was $311,800, representing a 14.8% year-over-year increase ($271,500 in September 2019). The national price increase in September represents the 103rd straight months of year-over-year growth.
The report also revealed that September recorded an all-time-low number of days for properties on the market, where properties remained on the market for 21 days, down from 22 days a month ago and 32 days from a year ago.
The report further showed that first-time homebuyers accounted for 31% of September sales, down from 33% both in August 2020 and September 2019. Moreover, individual investors or second-home buyers accounted for 12% of home sales in September, a slight drop from 14% recorded in both August 2020 and September 2019.
A combination of various factors has contributed to the rise in home sales’ pace in 2020 to surpass the previous years. “Existing home sales continued to register higher than one year ago as low mortgage rates helped offset the sting of sharply higher prices,” Danielle Hale, chief economist at Realtor.com says. “Greater buyer and, perhaps more importantly, seller confidence also helped boost home sales activity this month.”
“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,” Lawrence Yun says.
Additionally, Ruben Gonzalez, the chief economist at Keller Williams, says, “Higher earners have been more likely to retain their incomes, allowing the housing market to continue booming despite extremely high unemployment levels. Without a broader recovery, there remains a risk to the housing market.”
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Disclaimer: The views and opinions of Eric Lawrence Frazier are his own and do not necessarily represent First Bank or any organization affiliated with Eric Lawrence Frazier, or the Power Is Now Media Inc. First Bank is an Equal Credit Opportunity Lender. Eric Lawrence Frazier, MBA, is also a Vice President and Mortgage Advisor with First Bank. NMLS#461807 and a California Licensed Real Estate Broker DRE# 01143482. Email: Eric.firstname.lastname@example.org. Ph: 714- 475-8629.
Eric Lawrence Frazier MBA
President and CEO The Power Is Now Media Inc.