US home-owned sales rose the fastest in a year in September, suggesting a modest slowdown in house price growth, and lower mortgage rates a month earlier provided a tailwind to demand.
Deals rose 7% month-on-month, their highest since September 2020, to an annualized 6.29 million, according to figures from the National Association of Realtors. The median forecast in a Bloomberg survey of economists called for a plus of 3.7%.
"Some improvement in supply over the past few months helped boost sales in September," NAR chief economist Lawrence Yun said in a statement. "Housing demand remains strong as buyers are likely to want to secure a home before mortgage rates rise any further next year."
Buyer demand has been cooling since late 2020 due to a limited number of affordable apartments on the market, but it remains stable. Last month's annualized pace was the strongest since January, above the median estimate of 6.1 million in the Bloomberg poll.
The average sales price of an existing home rose 13.3% year over year to $ 352,800 in September. That was the smallest annual price increase since the end of 2020.
The available apartments are flying off the market, which underscores the strength of buyer demand. Properties stayed in the market an average of 17 days last month, compared to 21 days a year earlier. 86 percent of the homes sold in September had been on the market for less than a month.
Last month, 1.27 million homes were up for sale, 13% fewer than a year ago. At the current pace, it would take 2.4 months to sell all of the homes in the market, compared to an average of around 4 months before the pandemic. Brokers see anything under five months as a sign of a tight market.
High prices have pushed the dream of buying a home even further out of reach for many. Year over year, sales at the high end of the market are increasing, while property purchases below $ 250,000 are down.
The proportion of first-time buyers fell to 28% last month. And looking ahead, housing affordability is unlikely to improve. While borrowing costs were cheaper in August, the contract rate on a 30-year mortgage rose to a six-month high last week, according to the Mortgage Bankers Association.
Previously owned single family home sales rose 7.7% to 5.59 million last month. Existing condominium and cooperative sales rose 1.4% to 700,000 in September. Contracts increased in all regions, led by an 8.6% increase in the south. Sales also rose in the West by 6.5% and in the Midwest by 5.1%. Existing property sales account for around 90% of US residential construction and are billed at the time the contract is signed. New build sales, which make up the rest, are based on contract signing and will be released on October 26th.