Existing-home sales dropped in September, according to data released today by the National Association of Realtors (NAR). Sales fell 3.0% from the previous month to a seasonally adjusted annual rate of 4.91 million units, the same number hit last year—which was the worst year for existing-home sales in 13 years. On an annual basis, September’s numbers were 11.3% above the pace set in September 2010, as the year was heavily weighted toward sales in the earlier months as buyers rushed to close on homes before the expiration of the home-buyer tax credit.
Both the median and average prices of existing homes were down on an annual basis, dropping 3.5% and 2.5%, respectively. The median price of an existing home in September dropped 3.5% on an annual basis to $165,400. However, distressed properties as a percentage of total sales inched down to 30% of sales in September, from 31% the month before.
Cancellations—which Lawrence Yun, NAR’s chief economist, blamed for the low sales numbers saying that restrictive lending was keeping would-be buyers from being able to obtain financing—were unchanged from August at 18%.
On a regional basis, only the Northeast showed improvement while sales dropped in the South, West, and Midwest.
"Going forward, we are not expecting better numbers this year," said Patrick Newport, U.S. economist at IHS Global Insight. "Mortgage applications to buy homes were running at near 16-year lows in September and early October. … Applications remain depressed, despite record-low interest rates."
However, Newport did offer a bit of hope for future economic conditions, adding that, "oddly enough, the recent increase in long-term interest rates is probably good news for the housing market, since they are being driven by the same forces that have propelled the S&P forward 10% since Oct. 3—better-than-expected economic reports and better news on the Eurozone."
Claire Easley is a senior editor at Builder.
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