Shutter B \ Adobestock
After a slow month, existing-home sales climbed again in September, according to the National Association of Realtors (NAR). Every sales region in the country reported month-over-month sales increases. When comparing year-over-year figures, however, one region remained unchanged, while three others saw a drop in sales.
More Listings Are Needed
The improvement in September’s sales was likely due to a slight increase in the housing supply in prior months. According to Lawrence Yun, chief economist for the NAR, “Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year.” Those buyers, however, face challenges, as September’s total housing inventory fell 0.8% month over month to 1.27 million units. Inventory levels were down 13% from the same time a year earlier. At the current sales pace, this level of inventory would supply the housing market for only 2.4 months, a drop of 7.7% from a month ago. In September 2020, there was a 2.7-month supply of unsold inventory.
Get the Highest Price for Your Home
This lack of supply, coupled with high demand, is leading to price increases in every sales region of the country. In fact, for the past 115 consecutive months, home prices have climbed year over year. In September, the median existing-home price was up 13.3% from a year earlier. Yun sees relief on the horizon: “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.” As such, sellers looking to make the most of their investments should sell sooner rather than later. The average property in September sold in just 17 days; in comparison, a year ago, properties remained on the market for 21 days. Of all the homes sold in September 2021, 86% were available for less than one month.
Who’s Shopping for Homes?
While high home prices have been beneficial to sellers, they have been detrimental to first-time buyers. This group “is 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. As a result, first-time buyers accounted for just 28% of all home purchases in September, down from 29% a month ago and 31% a year ago. Individual investors or second-home buyers—two groups who account for the majority of all-cash sales—were responsible for 13% of all transactions, down from 15% a month ago but up from 12% a year ago. Of all the sales in September, 23% were all-cash, up from 22% in August and 18% in September 2020.
Regional Sales Breakdown
Northeast - Existing-home sales annual rate of 770,000; an increase of 5.5% from August 2021 but a decrease of 8.3% from September 2020. The median sales price increased 9.2% from September 2020.
Midwest - Existing-home sales annual rate of 1.44 million; an increase of 5.1% from August 2021 but a decrease of 2.7% from September 2020. The median sales price increased 9.1% from September 2020.
South - Existing-home sales annual rate of 2.77 million; an increase of 8.6% from August 2021 but unchanged from September 2020. The median sales price increased 14.8% from September 2020.
West - Existing-home sales annual rate of 1.31 million; an increase of 6.5% from August 2021 but a decrease of 3% from September 2020. The median sales price increased 8.3% from September 2020.
