Home sales in the U.S. rebounded in September.
Existing home sales rose 7% to a seasonally adjusted 6.29 million units in September from a month earlier, according to the National Association of Realtors (NAR). The results outpaced analyst expectations of a 3.6% increase, according to Bloomberg consensus estimates.
“This autumn looks to be the second best autumn home-sales season in 15 years,” Lawrence Yun, chief economist at NAR, said during a press conference releasing the new data.
Yun noted that the surge in activity last year, due to COVID-19 migration and pent-up demand, was the best autumn season for sales.
Yun also attributed the boost in activity to mortgage rates — which after increasing above 3% mid-year fell back to 2.8% in August — and positive job reports that lifted confidence in the market.
“Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year,” he said.
The increase in existing home sales was expected since pending home sales in August, which lead to actual sales, was up 8.1%, according to the NAR.
"September existing home sales soundly beat expectations and recorded their fastest annualized pace since last fall, recovering ground lost in August and illustrating the fact that even slight tilts in market conditions towards buyers can pay real dividends in increased sales activity," said Kwame Donaldson, Zillow senior economist, in a statement after the results. "Sales remain well below last October’s peak, when homebuyers rushed back into the housing market following the brief COVID-19 recession in a burst of demand that had been pent up during the pandemic lockdowns."
Median existing-home price for all housing types in September hit $352,800, up 13.3% from a year ago, but slightly down from previous month and the third straight month of declines. Yun noted that the trend is typical for the season, but also underscored that home price growth is moderating from its 20%-plus increases.
Despite the downward trend, first-time homebuyers represented 28% of all sales last month — the lowest point since July 2015. “Price increases are squeezing out the first-time homebuyers,” said Yun, adding that they don't have the savings or equity "to offset such a purchase."
Goldman Sachs economists recently forecasted a 16% increase in home prices by the end of 2022, citing the shortage in inventory as the main driver behind the price increases.
Total housing inventory at the end of September amounted to 1.27 million units, down 0.8% from August and down 13.0% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the present sales pace, down 7.7% from August and down from 2.7 months in September 2020.
"Supply side issues have reined housing activity in from cycle-highs over the course of 2021, even amid robust demand," said Credit Suisse in a research note prior to the results. "Supply problems may continue to dampen housing activity in the near term, but there are early signs that these supply issues could soon normalize. For example, the amount of housing 'authorized but not started' appears to have peaked and may come down in coming months, providing a tailwind to housing starts in the medium term."
Amanda Fung is an editor at Yahoo Finance.