Existing home sales jumped 10% in September, signalling the beginning of a housing recovery, the National Association of Realtors reported on Monday. The rate of sales, which includes single-family homes, townhomes, condos, and co-ops, was at an annual pace of 4.53 million homes in September after a downwardly revised rate of 4.12 million homes in August.

Lawrence Yun, NAR chief economist, said, “A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions,” he said.

The average rate for a thirty-year fixed rate conventional mortgage in September hit a record low of 4.35%, down from 4.43% in August, according to Freddie Mac. Housing prices also continue to remain below recent levels, though prices are skewed downward due to a high level of distressed home sales - 35% of sales were distress sales in September.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said the current market offers plenty of opportunities for buyers. “A decade ago, mortgage rates were almost double what they are today, and they’re about one-and-a-half percentage points lower than the peak of the housing boom in 2005,” Golder said. “In addition, home prices are running about 22% less than five years ago when they were bid up by the biggest housing rush on record. In fact, the median monthly mortgage payment in many areas is less than people are paying for rent,” Golder said.

At the September sales pace, there was a 10.7 month supply of homes on the market, down from a 12 month inventory of homes in August.

The median existing-home price in the U.S. was $171,700 last month - 2.4% lower than it was in September 2009.

By region, sales of existing homes increased 10.1% in September but remains 20.8% lower than the pace of sales a year ago. The median home price in the Northeast was $239,200, 1.4% lower than it was in September 2009.

In the Midwest, sales were 14.5% higher in September from the month before but were 26.4% below the pace from September 2009. The median home price was $139,700, 5.2% lower than it was a year ago.

Existing home sales in the South rose 10.6% for September but was 14.9% below the annual rate from a year ago. The median home price was 149,500, down 2.6% from the year before.

In the West, sales increased in September by 5%, but was 16.7% lower than the pace from a year ago. The median home price of $213,600 in September was 4.9% lower than it was last In September 2009.

“Vacant homes and homes where mortgages have not been paid for an extended number of months need to be cleared from the market as quickly as possible, with a new set of buyers helping the recovery along a healthy path,” Yun said.

Yun said it continues to be a buyer’s market and that a normal seasonal drop in housing inventory is expected within the next few months.


Source:
National Association of Realtors