Building on last week’s positive real estate data, existing home sales, which account for about 90 percent of the U.S. housing market, fell by 2.2 percent in September to a seasonally adjusted annual rate of 5.38 million units, according to the National Association of Realtors (NAR). That was worse than anticipated but the August print was revised higher and year-over-year growth jumped from 2.8 percent to 3.9 percent, the best reading since March 2017. The average time it takes for a property to sell also remained relatively low at 32 days, and nearly half (49 percent) of all homes sold in September were on the market for less than a month.
Even more encouraging are first-time homebuyers, who accounted for a third of all sales last month, whereas all-cash purchases are now below 20 percent of sales. This shift is a welcome sign that more young Americans are finally able to make the leap from renting to buying. To be fair some of the positive year-ago comparisons seen in the housing market lately are being helped by a very weak 2018 that was under pressure from rising interest rates. However, the Fed’s recent policy reversal has clearly provided some positive momentum to the housing market and expectations are high for additional easing later this month. NAR’s chief economist Lawrence Yun, though, stressed that realtors must “continue to beat the drum for more inventory … home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential.”
Sources: Econoday, NAR, Twitter, FRBSL