Existing US home sales fall in September: NAR
The sale of previously-owned homes fell by 10,000 units to 5.29 million in September, according to the National Association of Realtors. This represents a drop of 1.9 percent from the nearly four-year high in August, when previously-owned home sales reached 5.39 million.
September sales fell for the first time in three months, as rising mortgage rates kept potential buyers out of the market. Home sales were up 10.7 percent from a year ago, the NAR data showed, as sales remained above annualized levels for the 27th consecutive month.
“Affordability has fallen to a five-year low as home price increases easily outpaced income growth,” said NAR chief economist Lawrence Yun. Similar trends will likely occur over the next several months, as expectations for rising mortgage rates will continue to lower affordability and keep would-be buyers out of the market. The national median price of existing homes in September was $199,200, up almost 12 percent from a year ago. September represented the tenth consecutive month of annualized double-digit increases.
The NAR report showed distressed homes (foreclosures, short sales) represented 14 percent of total September sales, up two percentage points from the previous month. Distressed home sales in August declined to their lowest share since October 2008, when the NAR began tracking foreclosures. By comparison, distressed homes accounted for 24 percent of total home sales in September 2012.
The number of homes being sold continues to point to improvements in the real estate sector, a positive indicator for the broader US economy. However, rising interest rates and an uncertain economic climate will create strong headwinds for the real estate industry over the next several months. NAR President Gary Thomas warned the recent government shutdown could affect next month’s readings. The 16-day government shutdown created “delays in tax transcripts needed for approval of mortgage loans,” Thomas said, which could “put a monkey wrench in the transaction process…”
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