Sales of existing single-family homes, condo and coops jumped 10% in September, the strongest monthly gain in nearly 28 years, the National Association of Realtors reported Monday.
The news touched off a rally in builder stocks on Wall Street, with the entire group posting solid gains by late morning. Analysts were expecting a gain of 4%.
Sales of existing homes rose to a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August. Sales remain 19.1% below the pace in September 2009.
Single-family home sales were up 10% to a seasonally adjusted annual rate of3.97 million in September, 19.5% below September 2009. The median existing single-family home price was $172,600 in September, down 1.9% from a year earlier. Total months supply fell from 12 in August to 10.7 in September; for single-family, it fell from 11.6 to 10.2.
Condo and co-op sales rose 9.8% to a rate of 560,000 in September from 510,000 in August, 16.2% lower than the level one year ago. The median existing condo price was $165,400 in September, down 6.2% from September 2009.
Regionally, existing-home sales in September in the Northeast increased 10.1% to an annual pace of 760,000 in September but are 20.8% below September 2009. The median price in the Northeast was $239,200, 1.4% below a year ago. The Midwest jumped 14.5% to a level of 950,000, 26.4% below a year ago, with the median price down 5.2% year-over-year to $139,700. TheSouth rose 10.6% to an annual pace of 1.77 million, 14.9 lower thanSeptember 2009, with the median price falling 2.6% to $149,500. The West increased 5.0% to 1.05 million, 16.7% below a year prior, with the median price off 4.9% at $213,600.
A parallel Realtor survey put first-time buyers at 32% of the market, flat with August, with investors at 18%, down from 21%, and the rest repeat buyers. All-cash sales were at 29% in September, down a point from August.
Lawrence Yun, the Realtors' chief economist, was subdued in his comments on the data, concerned that while the data shows a strong gain, he still expects an uneven market. "A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium," he said. "But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions."
Yun added, "Vacant homes and homes where mortgages have not been paid for an extended number of months need to be cleared from the market as quickly as possible, with a new set of buyers helping the recovery along a healthy path. Inventory remains elevated and continues to favor buyers over sellers.A normal seasonal decline in inventory is expected through the upcoming months."
Unadjusted, however, sales were down across the board at 379,000, 8.5% off the August pace and 19% off that of last year.
"We view the increase in September existing home sales positively, as it potentially signifies a post-tax credit recovery and suggests there may be some elasticity in response to very low relative mortgage rates," wrote Wells Fargo home building analyst Carl Reichardt. " However, the recent foreclosure freezes/moratoriums by large banks may lead to some cancellations of current contracts as banks reconsider their ownership and titles become more questionable. While this may negatively impact October and November existing and pending home sales data, we expect new home sales to potentially be positively impacted."