The median home price in the United States was over $ 352,000 last month, a 13.3% jump from September of last year, the Associated Press reported.
The boost came as first-time home buyers bought at the lowest level since July 2015, accounting for 28% of all home sales in September, according to the National Association of Realtors (NAR).
The NAR said the number of previously occupied homes sold rose 7 percent in September from August, which equates to a seasonally adjusted annual rate of 6.29 million units, AP reported. While sales surged sharply in September, the home buying fervor that has boosted median house price increases of 20 to 25 percent annually appears to be easing.
Lawrence Yun, the chief economist of NAR, said homes available for purchase receive fewer multiple offers, while more potential buyers refuse to waive their rights to inspect and d evaluation of the house. However, the number of homes on the market is still below demand in much of the United States, maintaining higher prices, according to AP.
For more Associated Press reporting, see below.
Sales were down 2.3% from September last year, a time when home purchases rose as buyers who had steered clear during the first months of the pandemic returned in strength.
“The increase in sales over the past month, I would attribute it to mortgage rates,” Yun said. “This fall season appears to be one of the best fall home selling seasons in 15 years.”
Yun noted that a drop in mortgage rates in August made buyers urgent to close deals on homes, which resulted in the sharp increase in deals closed in September.
While the average rate on a 30-year mortgage remains near its all-time low, it has risen slightly since August, when the weekly rate averaged 2.77%, according to mortgage buyer Freddie Mac. .
This week, the average rate rose to 3.09%, the highest level since April, when it peaked at 3.18%. A year ago, the rate was on average 2.8%. When mortgage rates rise, it reduces the purchasing power of future homeowners.
Economists expect mortgage rates to rise as much as 4% next year as the Federal Reserve takes action to control rising inflation. The central bank is expected to broadly announce a schedule for reducing its monthly bond purchases at its policy meeting next month. These bond purchases have helped keep mortgage rates extremely low for most of the past 18 months.
Homes bought with cash were up 23 percent in September from the previous month. Individual investors, who account for many cash sales, accounted for 13% of all home sales last month.
At the end of September, the stock of unsold homes stood at just 1.27 million homes for sale, down 0.8% from the previous month and 13% from a year ago. At the current pace of sales, that equates to a 2.4-month supply, down from 2.7 months a year ago, the NAR said.
Homes continue to sell for a few days after they go on sale. The homes typically stayed on the market for 17 days before they were bought last month. This has been maintained over the past six months. In a more balanced market between buyers and sellers, homes typically stay on the market for 45 days. In total, 86 percent of homes sold last month were on the market for less than 30 days.
The inventory of homes for sale is expected to start improving next year, as builders continue to ramp up construction and the end of mortgage forbearance programs force financially troubled homeowners to put their homes up for sale. Yun said.
“The days when stocks were down 20% or 25%, those days are gone,” Yun said. “The decline is diminishing and soon in 2022 we will start to see inventory increasing year over year.”