The increase in existing home sales in September may be due to a brief fall in mortgage interest rates

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A house available for sale will be on display in Houston, Texas on August 12, 2021.

Brandon Bell | Getty Images

According to data from the National Association of Realtors, second-hand housing sales in September increased by 7%, with a seasonally adjusted annual growth rate of 6.29 million units.

The organization’s chief economist Lawrence Yun (Lawrence Yun) pointed out that due to sales growth, mortgage interest rates fell briefly in August. The average interest rate for a 30-year fixed rate fell below 3%, and then rose sharply again last month.

Existing home sales data is based on completed sales, and representatives may sign contracts in July and August.

Sales are down 2.3% from September 2020.

First-time home buyers accounted for only 28% of sales, the lowest level since July 2015.

As of September, the supply of houses for sale was 1.27 million units, a year-on-year decrease of 13%. At the current sales rate, this represents 2.4 months of supply.

Insufficient supply continues to push up prices. The median price of existing homes sold in September was $352,800. This is 13.3% higher than in September 2020. Although the annual income is high, it is now slowing down.

“With the end of the mortgage tolerance program, and as home builders increase production-despite supply chain material issues-we may see more homes listed in 2022,” Yun said.

The median price is largely affected by the portfolio of houses currently sold. Most activities take place in the high-end market, because the low-end inventory is the weakest. For example, sales of homes priced between US$100,000 and US$250,000 were down 23% year-on-year, while sales of homes priced above US$1 million were 30% higher.

Sales of newly built houses in August were calculated based on signed contracts, so they were comparable to the existing sales figures in September, a year-on-year decrease of 24%. As builders struggled with supply chain issues and rising land, labor, and material costs, new home prices rose by 20%.


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