Home Sales Rebounded in September, Thanks to First-time Buyers

After two months of decreases, September 2016 existing-home sales rebounded strongly in all four regions of the U.S. First-time homebuyers reached a 34% share, the highest rate in more than four years, according to the National Association of RealtorsⓇ’ (NAR) monthly report.

Sales rose across the nation to reflect a national 3.2% increase from August. After last month’s decline, September’s sales are slightly higher than one year ago (0.6%). Existing-home sales in the South increased 0.9% for the month to an annual rate of 2.16 million, but were still 0.9% below September 2015.

NAR’s chief economist, Lawrence Yun, commented on the housing market’s reverse in course:

“The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale. Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time homeowners to buy last month.”

Yun added, “There’s hope [that] the leap in sales to first-time buyers can stick through the rest of the year and into next spring. The market fundamentals—primarily consistent job gains and affordable mortgage rates—are there for the steady rise in first-timers needed to finally reverse the decline in the homeownership rate.”

Existing-home sales, Sept 2015 vs Sept 2016

As opposed to home sales, home prices continue to climb steadily year over year. The U.S. September median existing-home price for all housing types (single-family homes, townhomes, condominiums, and co-ops) was $234,200, a 5.6% increase from September 2015 ($221,700). September now marks the 55th consecutive month of year-over-year gains. Regionally, the median price in the South was $204,000, up 6.6% from one year ago. Locally, Beverly-Hanks reported in our Q3 Market Report a median regional sales price of $226,700, up 5.9% from $214,000 in Q3 2015.

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Region

Median Home Price

(Sept. 2016)

Median Price Increase

(Sept. 2015 to Sept. 2016)

U.S.

$234,200

+5.6%

South

$204,000

+6.6%

WNC

$226,700 (Q3)

+5.9% (Q3)

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Median home sales, Sept 2015 vs Sept 2016

Total housing inventory rose 1.5% in September, but could not overcome year-long shortages reflecting a 6.8% decrease from September 2015. This is the 16th consecutive month of year-over-year declines in inventory. Properties on the market sold in an average of 39 days during this period. Yun continued:

“Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in. Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage inched up in September for the first time since March. Rates are now 3.46% compared to 3.44% in August. The average commitment rate for all of 2015 was 3.85%.

 

Read more about existing-home sales on NAR. Locally, homes sales are mirroring many of the national trends. View the Beverly-Hanks Quarterly Market Report to see how home sales are growing in your community.

 

 

 

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