Home sales rose faster-than-expected in September to their highest level in 14 years as the desire for more space and record-low mortgage rates continue to support demand.
The number of contracts signed rose 9.4% from the previous month to an annualized 6.54 million, the fastest pace since May 2006, after 5.98 million in August, the National Association of Realtors announced on Thursday. The median forecast in a Bloomberg poll of economists in September was 6.3 million. Single family home sales outpaced condominium purchases.
The numbers, which included record sales prices and leaner inventories, confirm other data showing a booming real estate market, which is a major source of fuel for the economy. With the pandemic forcing many Americans to work and study from home, the demand for single-family homes has increased while record-low mortgage rates have attracted more buyers.
Housing "is clearly much better than a V-shaped recovery. So it's not just about recovering, but far exceeding what happened before the pandemic," said Lawrence Yun, chief economist at NAR, on a call Reporters. At the same time, "property prices are rising too quickly due to insufficient supply and very strong demand."
Real estate stayed in the market for just 21 days in September, an all-time low and less than 32 days in the same month last year, according to the NAR.
The available inventory decreased compared to the previous year by 19.2% to 1.47 million units. According to the NAR, this was the lowest value since September. At the current pace, it would take 2.7 months to sell all of the homes in the market, the lowest ever. Brokers see anything under five months as a sign of a tight market.
The median sales price in September rose 14.8% year over year to a record $ 311,800.
Home builders are working to keep up with demand when supply is meager. The number of single-family homes has been highest since 2007, and the home-building sentiment is at a record high.
Previously owned single-family home sales rose 9.7% to 5.35 million, the fastest since April 2006.
The NAR report showed that existing home purchases rose in all four US regions, including an 8.5% increase in the south to an all-time high and an increase of 9.6% in the west.
"Home sales traditionally decline towards the end of the year, but in September they rose beyond what we normally see this season," Yun said in a statement. "I would attribute this jump to record-low interest rates and an abundance of buyers in the market, including vacation home buyers, because they have more flexibility to work from home."
Existing home sales make up approximately 90% of US homes and are charged when a contract is signed. New build sales that make up the rest are based on contract signing and will be released on Monday.