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Existing-Home Sales Rose 7% YOY in September

David Krechevsky
Oct 27, 2021

All 4 U.S. regions post month-over-month gains, but 3 of 4 post year-over-year declines.

KEY TAKEAWAYS
  • Existing-home sales on a seasonally adjusted annual rate rose 7% in September from August, with all regions showing an increase.
  • From one year ago, the inventory of unsold homes decreased 13% to 1.27 million – equivalent to 2.4 months of the monthly sales pace. From the prior month, inventory dipped 0.8%.
  • The median existing-home sales price climbed 13.3% year-over-year to $352,800.

Existing-home sales rebounded in September after falling off in August, the National Association of Realtors said this week. Each of the four major U.S. regions posted increases on a month-over-month basis, while year over year one region held steady while the others reported sales declines.

Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums and co-ops — rose 7% from August to a seasonally adjusted annual rate of 6.29 million in September. Sales decreased 2.3%, however, from a year earlier (6.44 million in September 2020).

"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 13% from a year ago. Unsold inventory sits at a 2.4-month supply at the present sales pace, down 7.7% from August and 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," Yun said.

Properties typically remained on the market for 17 days in September, unchanged from August and down from 21 days in September 2020. NAR said 86% 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.

"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.

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% from a year earlier. 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.

Regionally, existing-home sales in the Northeast grew 5.5% in September, posting an annual rate of 770,000, an 8.3% decrease from a year earlier. The median price in the Northeast was $387,200, up 9.2% from one year ago.

In the Midwest, existing-home sales 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.

The National Association of Realtors is America's largest trade association, with more than 1.5 million members.

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