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The pace of existing home sales in September rebounded from declining activity in July and August, driven by increasing sales to first-time buyers.
The National Association of Realtors® reported that the September seasonally adjusted annualized rate of existing home sales increased 3 percent when analysts had been expecting no change following two months of decline.
As a result of the increase, the annualized pace of existing home sales is at 5,470,000 and is now back in line with the pace we saw in the spring.
That pace of sales is 1 percent higher than September of last year.
This performance was against a backdrop of a 7 percent year-over-year decline in the inventory of homes available for sale.
We are in the time of the year when existing home sales decline as a result of seasonality. Looking at unadjusted numbers, September saw 484,000 sales, which was a 10 percent decline from August and a 3 percent increase over last September.
The increase in activity is primarily a result of a substantial increase in the share of purchases of first-time buyers, which reached 34 percent according to the NAR data. That’s the highest share in more than 4 years and is inline with the big shift in demand we starting observing on realtor.com in August.
While the supply of homes for sale at 4.5 months is officially tighter now than in July or August, more first-time buyers are finding success because they face less competition in this slower time of the year.
Inventory is barely now past its peak for the year, yet fewer buyers are attempting to close on a home now until next spring. That means there is more available inventory per buyer now than we’ve seen in the last four months.
If you are a first-time buyer and you are in a position to buy now, this is the best time of the year to do so as you face less competition and you have more leverage with sellers.
This is only the beginning of the return of the first-time buyer as the potential for more growth in first-time buyers in the months and year ahead is substantial. In September, 52 percent of the active shopper pool was a first-time buyer.
A 34 percent share is still depressed by historical standards, but even so this gradual increase has resulted in year-to-date growth in sales to first-time buyers that is nearly three times the growth in existing home sales overall.
If the economy continues to see growth and mortgage rates only rise gradually, we have the potential of seeing much more substantial growth in this segment driving the overall growth in the market.
If you are a first-time home buyer, call us today!
Content courtesy of Realtor.com
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James Silver
Associate Broker | Team Leader
James Silver Team, Keller Williams
Michigan | Florida
(248) 530-7292 | JamesSilver@kw.com
