Key Highlights
- Unexpectedly, existing home sales jumped +9.4% in September
- Median price of existing home sold was $311,800, a +14.8% gain compared with September 2019
- Inventory of for-sale homes plummeted -19.2% annually to just 1.47M nationwide
Sales of existing homes in September literally flew off the shelves throughout the country. According to the National Association of REALTORS® (NAR), existing home sales skyrocketed +9.4% to a seasonally adjusted annualized rate of 6.54M units. Annually, sales of existing homes jumped +20.9%.
If there were more for-sale homes available, more existing homes would be sold as low interest rates for mortgage-seeking buyers are nearly irresistible. Sales inventory fell a whopping -19.2% annually to just 1.47M units, representing only a 2.7 month supply at the end of September. This is the lowest supply of for-sale homes since NAR began tracking this metric in 1982.
This squeaky tight inventory, a reality in nearly all national housing markets for months, continues to push prices higher and higher. The median price of an existing home sold in September was $311,800, a gain of +14.8% compared with September 2019 when median home prices were -$40,000 less. Not only is this an all-time high dating back to 1968, it is also an all-time home sale price high when adjusted for inflation.
Mike Fratantoni, chief economist with the Mortgage Bankers Association, said, “The primary constraint to even more sales is the plummeting inventory of homes on the market, which is leading to bidding wars and spikes in home prices across the country…Fortunately, we are seeing a pickup in the pace of construction which should bring more inventory onto the market for next year’s buyers.”
Lawrence Yun, chief economist with NAR, said, “Americans are splurging on spending for housing…(and) home prices are simply rising too fast.” Yun, along with many other economists, would like to see home sale prices rise in concert with wages. Yun believes that such home sale prices “…will eventually lead to a chocking point where first-time buyers simply can not show up to the market.”
Already, first-time buyers are decreasing. In September, first-time buyers represented 31% of the market whereas in a healthy market, first-time buyers represent 35% to 40% of the market.
Take a look at September existing home sales on a regional basis:
- Northeast – +16.2% m/m and +22.9% from one year ago
- Median sale price was $354,500, +17.8% from September 2019
- Midwest – +7.1% m/m and +19.8% from one year ago
- Median sale price was $243,100, +14.8% from September 2019
- South – +8.5% m/m and +22.3% from September 2019
- Median sale price was $266,900. +13% from September 2019
- West – +9.6% m/m and +18.1% from one year ago
- Median Sale price was $470.800, +17.1% from September 2019
Another stunner is that the sales of newly built homes in August came in +43% than the year before.
Thanks to National Public Radio, National Association of REALTORS® and CNBC.
Also read: Top Major Metros Increasing & Decreasing in Foreclosure Starts, Rental Growth Hits +3% in November 2019 & Existing Sales Volume Hit +10.8% y/y in December 2019, Homeownership Too Expensive for Average Workers in Q3 2020
