Eye On Housing
Existing home sales, as reported by the National Association of Realtors, increased 4.7% in September, and have increased year-over-year for 12 consecutive months. However, the first-time buyer share decreased to 29%, down from 32% the previous month. Total existing home sales in September increased to a seasonally adjusted rate of 5.55 million units combined for single-family homes, townhomes, condominiums and co-ops, up from a downwardly revised 5.30 million units in August. September existing sales were up 8.8% from the same period a year ago.
Existing sales increased in all four regions in September, ranging from 8.6% in the Northeast to 2.3% in the Midwest. Year-over-year, all four regions also increased, ranging from 12.0% in the Midwest to 5.7% in the South.
Total housing inventory decreased by 2.6% in September, and is 3.1% below its level a year ago. At the current sales rate, the September unsold inventory represents 4.8-month supply, compared to a 5.1-month supply in August. Some 38% of existing homes in September were on the market for less than a month, compared to 47% three months earlier in June.
The distressed sales share remained at 7% in September for the fourth consecutive month, matching the lowest share since the series was launched in October 2008. Distressed sales are defined as foreclosures and short sales sold at deep discounts. The September all-cash sales share increased to 24% in September from the August level of 22% which matched the lowest share since December 2009. Individual investors purchased a 13% share in September, compared to 14% from the same period a year ago.
The September median sales price of $221,900 was 6.1% above the same month a year ago, and represented the 43rd consecutive month of year-over-year price increases. The median condominium/co-op price of $209,200 in September was up 1.9% from the same month a year ago.
Although the Pending Home Sales Index decreased 1.4% in August, total existing sales resumed their steady upward trend. With builder confidence at a ten year high, new construction has begun adding to the total inventory. However, the first-time buyer is not consistently participating in this recovery.
Twenty-five percent of the largest market segment missing in action is a serious problem that is going unaddressed. With the FED looking to increase interest rates this year or early next, the first-time buyer share can only decline further.