Existing home sales fall in September 2013

Existing home sales fell in September in the United States, after reaching the highest level in almost four years, says a new report by the National Association of Realtors (NAR).

Existing home sales include condominiums, townhomes, single-family homes and coops.

Total existing home sales went down by 1.9% in September to a seasonally-adjusted yearly rate of 5.29 million, compared to 5.39 million in August. However, September 2013 figures were 10.7% higher than in September 2012 (4.78 million).

The NAR says that sales of existing homes have beaten levels 12 months previously for 27 consecutive months.

The NAR adds that limited inventory conditions continue to push home prices up across most of the nation.

NAR chief economist, Lawrence Yun, said:

“Affordability has fallen to a five-year low as home price increases easily outpaced income growth. Expected rising mortgage interest rates will further lower affordability in upcoming months. Next month we may see some delays associated with the government shutdown.”

The national average commitment rate for a 30-year, conventional fixed mortgage increased to 4.49% in September, according to Freddie Mac, from 4.46% the month before. This is the highest rate since July 2011 (4.55%). In September 2012 the rate was 3.47%.

The median existing home price across the country for all housing types in September was 11.7% higher ($199,200) than in September 2012. Prices have seen double-digit increases (annualized) for 10 consecutive months.

Fourteen percent of September sales consisted of distressed home (foreclosures 9% and short sales 5%), 12% higher than in August (24% in September 2012).

According to realtor.com data, listing prices rose 44.6% in the Detroit area, 30.7% in Las Vegas and 28.9% in Sacramento.

There were 2.21 existing homes available for sale in September 2013, i.e. 5 months’ worth of supply at the current sales pace (August 5.4 months).

NAR President Gary Thomas said “Just one impact of the recent government shutdown – delays in tax transcripts needed for approval of mortgage loans – put a monkey wrench in the transaction process and could negatively impact sales closings in next month’s report.”

10% of existing home sales in flood zones

Thomas added that 10% of transactions in September occurred in flood zones. Nearly 10% of all those transactions were canceled or delayed because of concerns regarding higher insurance rates. As of October 1st, higher flood insurance rates came into effect. The NAR believes they may impact sales in flood zones.

In September the average house was on the market for 50 days, compared to 43 in August 2013 and 70 days in September 2012. Foreclosures sold within 43 days and short sales within 93. Thirty-nine percent of houses in September were sold within one month.

Twenty-eight percent of purchases in September were first-time buyers, compared to 32% in September 2012 (unchanged compared to August 2013).

Thirty-three percent of September transactions were all-cash sales (August 32%) compared to 28% in September 2012.