Learn more about the latest housing market trends for existing home sales, new construction and mortgage interest rates.
Sales of existing homes slowed in the month of September, but prices rose for the seventh consecutive month, according to a report released today by the National Association of Realtors, which hails the data as continued signs of a genuine recovery for the housing market.
Total existing home sales fell 1.7 percent from August to September to a seasonally adjusted annual rate of 4.75 million, but the pace of sales was 11 percent higher than the 4.28 million rate for September 2011, according to the realtors group. The national median price for all types of existing homes – including townhomes, condominiums and co-ops – was $183,900 in September, a year-over-year increase of 11.3 percent from September 2011.
“Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery,” Lawrence Yun, the association’s chief economist, said in a statement. “More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest.”
Distressed sales – homes in foreclosure or sold at deep discounts – made up nearly one-fourth (24 percent) of existing home sales in September, up from 22 percent in August but less than the 30 percent share for September 2011. Foreclosures sold at an average discount of 21 percent below market value in August, while short sales were discounted an average of 13 percent.
Total housing market inventory fell 3.3 percent in September to 2.32 million existing homes, a 5.9-month supply at the current sales rate. A year ago, the housing market had an 8.1-month supply of existing homes for sale.
“The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless home builders robustly ramp up production,” Yun said. Home builders appear to be doing just that, according data released by the Commerce Department on Wednesday. Housing starts rose by 15 percent in the month of September, following a 4 percent increase in August. The spike in activity brings the current pace of home construction to a seasonally adjusted annual rate of 872,000, a 35 percent increase from September 2011. The number of new building permits issued, a forward-looking indicator, rose nearly 12 percent from August to September. Home builders also expressed increasing confidence in the housing market, according to data released by the National Association of Home Builders on Tuesday.
Home mortgage interest rates remain near record lows, according to Freddie Mac, which reported an average rate of 3.37 percent for a 30-year fixed-rate mortgage, just off the record of 3.36 percent, and a new average low for a 15-year fixed rate mortgage of 2.66 percent. Affordable rates are encouraging some buyers to enter the housing market, but tight credit conditions are continuing to constrain sales, according to anlaysts.