By Sabrina Karl
Sales of existing homes are on a tear throughout the country, bringing already low inventories lower and driving sales prices up, according to the latest monthly report from the National Realtors Association.
September’s reading represents the fourth month in a row that existing home sales have risen, registering 9.4% higher than in August. In addition, last month’s sales eclipsed last September’s reading by almost 21%.
At 6.54 million units sold, it’s the highest level seen in 14 years, when 6.68 million were sold in May 2006.
Typically, sales begin to slow down at this time of year. But 2020’s historically low mortgage rates have driven significant numbers of buyers into the market. Meanwhile, the inventory of available homes has dropped 1.3% since August and more than 19 percent since last September.
The current imbalance between buyers in the market and homes available is the lowest on record, with inventory at the end of September dwindling to a 2.7 months’ supply. That’s less than half of the 6-month supply that’s considered to indicate a balanced market.
As a result, the median existing home price has been shooting up, from $271,500 in September 2019 to $311,800 this year, for an almost 15% gain. It’s the 103rd consecutive month that the median price has exhibited year-over-year growth.
The month-over-month and year-over-year sales increases were present in all four regions of the U.S., with the trend most pronounced in the Northeast. Median price increases were also observed in every region.
A slight pullback is starting to be seen, however, in the Midwest, South, and West. A week after releasing its existing home sales report, the Realtors published data on pending home contracts, a forward-looking indicator. Overall, pending contracts are down a modest 2.2% from August, with only the Northeast region showing a September increase.