U.S. Existing-Home Sales Rose 9.4% in September -- Update
October 22 2020 - 11:03AM
Dow Jones News
By Nicole Friedman
Sales of previously owned homes in the U.S. rose to a new
14-year high in September while robust demand and a shortage of
homes for sale pushed house prices higher.
Existing-home sales rose 9.4% in September from August to a
seasonally adjusted annual rate of 6.54 million, the highest rate
since May 2006, the National Association of Realtors said Thursday.
The September sales marked a 20.9% increase from a year
earlier.
Economists surveyed by The Wall Street Journal expected a 6.2%
monthly increase in sales of previously owned homes, which make up
most of the housing market.
"Home prices are simply rising too fast due to insufficient
supply and very strong demand," said Lawrence Yun, NAR's chief
economist.
A very limited supply of homes for sale, especially in lower
price tiers, pushed prices to new highs. The median existing-home
price rose 14.8% from a year earlier to $311,800, a record high
nominally and adjusted for inflation, NAR said.
Real-estate agents and economists credit the strong demand for
housing to record-low interest rates, a large population of
millennials entering prime homebuying years and a desire for more
household space driven by the coronavirus pandemic. As many people
work and attend school from home, home shoppers are willing to move
farther from their offices in exchange for bigger houses with more
outdoor space.
A strong housing market can be a positive sign for the economy,
prompting more construction activity and spending on home goods
such as furniture. But a pre-existing shortage of homes has
worsened in recent months, as buyers flooded into the market and
sellers held off on listing their homes.
There were 1.47 million homes for sale at the end of September,
down 1.3% from August and 19.2% from September 2019, according to
NAR. At the current sales pace, there was a 2.7-month supply of
homes on the market at the end of September.
In Phoenix, for example, total for-sale listings in the week
ended Oct. 10 fell 21% year-over-year and home values rose almost
12% in September from a year earlier, according to Zillow Group
Inc.
Houses often stay on the market for less than a week, said R.J.
Apana, who closed on a four-bedroom house in Phoenix in
September.
"Those good properties that have what you're looking for
amenity-wise and then also fit into your budget, those usually
don't last too long," he said. "When you are looking and find
something you like, you have to be very aggressive."
Some workers are moving from high-cost coastal cities to more
affordable locales, making those markets more competitive. Of 87
large metro areas tracked by real-estate brokerage Redfin Corp.,
only San Francisco and New York City posted an annual increase in
the number of homes for sale in September.
"Urban and city centers are seeing what I would call a demise in
demand, " said Mike Miedler, chief executive of Century 21 Real
Estate LLC, a subsidiary of Realogy Holdings Corp. Meanwhile, "in
some places, like Jacksonville, like Salt Lake City, like
Sacramento, the [prices] are through the roof. They're getting
astronomical."
Existing-home sales rose the most month-over-month in the
Northeast, at 16.2%, and in the West, at 9.6%.
Homes typically go under contract a month or two before the
contract closes, so the September figures largely reflect purchase
decisions made in August or July.
New-home sales, which make up about 10% of the market, have also
climbed in recent months. A measure of U.S. home-builder confidence
rose to a record high in October in data going back to 1985, the
National Association of Home Builders said Monday.
Housing starts, a measure of U.S. home-building, rose 1.9% in
September from August, the Commerce Department said Tuesday.
Residential permits, which can be a bellwether for future home
construction, increased 5.2%.
News Corp., owner of The Wall Street Journal, also operates
Realtor.com under license from the National Association of
Realtors.
Write to Nicole Friedman at nicole.friedman@wsj.com
(END) Dow Jones Newswires
October 22, 2020 10:48 ET (14:48 GMT)
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