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Seasonality plays an essential role in the housing market, as it has a significant impact on the supply of and demand for housing. Transactions and prices tend to be above trend in summer, while activity slows down in winter. This year, however, the housing market still looks exceptionally strong in what is generally considered the slowest part of the year.
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On Thursday, the National Association of Realtors reported that 6.29 million existing homes were sold in September, up from 5.88 million in August, the Wall Street Journal reported. This was the best month since January, when 6.66 million homes were sold.
These figures are all adjusted for seasonal fluctuations. Unadjusted, the WSJ noted that September’s existing home sales were about 5% lower than August, but 50% higher than January. These data suggest that buyers and sellers are not following the usual patterns. The WSJ pointed out that, as a result, realtors could be much busier in the fall and winter compared to pre-pandemic seasonal trends.
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“Interest rates are at historically low levels, there is a lot of demand for homes during the pandemic, and there aren’t enough homes to buy,” Daryl Fairweather, chief economist at Redfin, told CNBC . Fairweather also noted that the past decade has seen the fewest homes built in the United States since the 1960s. According to the WSJ, there were only 2.4 months of homes on the market in September, down from 3.9 for the same month in 2019.
This could continue to put pressure on home prices. In September, the average home price was $ 377,000, according to real estate broker Redfin, CNBC reported. That’s an increase of 14% from the same month last year and 30% from 2019.
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The housing supply problem has been going on for years, the WSJ added, and it could be years before supply can keep up with demand.
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Last updated: October 22, 2021