U.S. Existing-Home Sales Increased 7.0% in September; Northeast Sales Grew 5.5%
Real Estate In-Depth | October 22, 2021
WASHINGTON—Existing-home sales rebounded in September after seeing sales wane the previous month, according to the National Association of Realtors. Each of the four major U.S. regions witnessed increases on a month-over-month basis. From a year-over-year timeframe, one region held steady while the three others each reported a decline in sales.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 7.0% from August to a seasonally adjusted annual rate of 6.29 million in September. However, sales decreased 2.3% from a year ago (6.44 million in September 2020). Existing-home sales in the Northeast grew 5.5% in September, posting an annual rate of 770,000, an 8.3% decrease from September 2020. The median price in the Northeast was $387,200, up 9.2% from one year ago.
“Some improvement in supply during prior months helped nudge up sales in September,” said Lawrence Yun, NAR’s chief economist. “Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year.”
Total housing inventory at the end of September amounted to 1.27 million units, down 0.8% from August and down 13.0% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the present sales pace, down 7.7% from August and down from 2.7 months in September 2020.
The median existing-home price for all housing types in September was $352,800, up 13.3% from September 2020 ($311,500), as prices rose in each region. This marks 115 straight months of year-over-year increases.
“As mortgage forbearance programs end, and as homebuilders ramp up production—despite the supply-chain material issues—we are likely to see more homes on the market as soon as 2022,” said Yun.
Properties typically remained on the market for 17 days in September, unchanged from August and down from 21 days in September 2020. Eighty-six percent of homes sold in September 2021 were on the market for less than a month.
First-time buyers accounted for 28% of sales in September, down from 29% in August and 31% in September 2020. NAR’s 2020 Profile of Home Buyers and Sellers—released in late 2020—revealed 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,” said Yun.
Individual investors or second-home buyers, who account for many cash sales, purchased 13% of homes in September, down from 15% in August but up from 12% in September 2020. All-cash sales accounted for 23% of transactions in September, up from both 22% in August and from 18% in September 2020.
Distressed sales—foreclosures and short sales—represented less than 1% of sales in September, equal to the percentage seen a month prior and equal to September 2020.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.90 in September, up from 2.84% in August. The average commitment rate across all of 2020 was 3.11%.
Single-Family and Condo/Co-op Sales
Single-family home sales decreased to a seasonally adjusted annual rate of 5.59 million in September, up 7.7% from 5.19 million in August and down 3.1% from one year ago. The median existing single-family home price was $359,700 in September, up 13.8% from September 2020.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 700,000 units in September, up 1.4% from 690,000 in August and up 4.5% from one year ago. The median existing condo price was $297,900 in September, an annual increase of 9.3%.
“As housing laws change and new legislation is proposed, NAR remains steadfast in its mission to promote and defend homeownership opportunities for all,” said NAR President Charlie Oppler, a Realtor from Franklin Lakes, NJ and the CEO of Prominent Properties Sotheby’s International Realty. “We continually work on behalf of consumers and our members to see inventory increased and ensure homebuyer and homeowner rights are protected.”
Existing-home sales in the Midwest rose 5.1% to an annual rate of 1,440,000 in September, a 2.7% drop from a year ago. The median price in the Midwest was $265,300, a 9.1% increase from September 2020.
Existing-home sales in the South jumped 8.6% in September, recording an annual rate of 2,770,000, unchanged from one year ago. The median price in the South was $307,500, a 14.8% rise from one year ago.
Existing-home sales in the West climbed 6.5%, registering an annual rate of 1,310,000 in September, down 3.0% from one year ago. The median price in the West was $506,300, up 8.3% from September 2020.