National Home Sales and Prices Continue to Soar
For the fourth month in a row, existing-home sales climbed across the country, according to the National Association of Realtors (NAR). Every region saw sales increase, both month over month and year over year. The Northeast experienced the greatest gains, with sales up 9.4% from August and an impressive 21% from September 2019. According to Lawrence Yun, chief economist for the NAR, September’s sales gains go against the trend, as home sales typically start to decline toward the end of the year. “I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace,” he says, “including buyers of vacation homes given the greater flexibility to work from home.”
Median Prices Are Up
This increase in demand has driven up home prices. In September, the median existing-home price for all types of housing climbed 14.8% from a year ago, marking the 103rd straight month of year-over-year increases. Every sales region in the country reported price gains.
More Inventory Needed to Meet Demand
Buyer demand might be high, but housing inventory remains at historically low levels. At the end of September, the housing supply fell 1.3% from August and 19.2% from September 2019. At the current sales pace, the current level of inventory would supply the market for only 2.7 months. In comparison, there was a three-month supply of housing available in August and a four-month supply a year ago. New home construction could help to boost supply levels. According to Yun, “To their credit, we have seen some homebuilders move to ramp up supply, but a need for even more production still exists.”
Properties Selling in Record Time
The lack of supply, combined with strong buyer demand, is leading to high turnover. The average property remained available for sale for just 21 days in September; this is an all-time low. A month ago, properties were on the market for 22 days, while a year ago they were on the market for 32 days. Of all the homes sold in September, 71% were available for less than a month.
For the past four months, month-over-month sales have climbed in every region. What’s more, year-over-year home prices have seen double-digit increases in all areas of the country.
Northeast – Existing-home sales increased 16.2% from August 2020 and 22.9% from September 2019. The median sales price increased 17.8% from September 2019.
Midwest – Existing-home sales increased 7.1% from August 2020 and 19.8% from September 2019. The median sales price increased 14.8% from September 2019.
South – Existing-home sales increased 8.5% from August 2020 and 22.3% from September 2019. The median sales price increased 13% from September 2019.
West – Existing-home sales increased 9.6% from August 2020 and 18.1% from September 2019. The median sales price increased 17.1% from September 2019.