Driven by all-time-low mortgage rates and an exodus from urban centers prompted by the pandemic, existing-home sales reached a seasonally-adjusted annual rate of 6.54 million in September, up 9.4% compared with August and up 20.9% compared with September 2019, according to the National Association of Realtors (NAR).
It was the fourth consecutive month that existing-home sales increased on a month-over-month basis.
Regionally, and month-over-month, existing-home sales jumped 16.2% in the Northeast, 9.6% in the West, 8.5% in the South, and 7.1% in the Midwest.
The results include sales of existing single-family homes, townhomes, condominiums and co-ops.
“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” says Lawrence Yun, chief economist for NAR, in a statement. “I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.”
The median existing-home price for all housing types in September was $311,800, up 14.8% from $271,500 in September 2019.
The only thing holding home sales back? Lack of inventory.
Total housing inventory at the end of September totaled 1.47 million units, down 1.3% from August and down 19.2% from a year ago.
That’s only a 2.7-month supply at the current sales pace.
“There is no shortage of hopeful, potential buyers, but inventory is historically low,” Yun explains. “To their credit, we have seen some homebuilders move to ramp up supply, but a need for even more production still exists.”
Sales in vacation destination counties have seen a strong acceleration since July, with a 34% year-over-year gain in September.
“The uncertainty about when the pandemic will end coupled with the ability to work from home appears to have boosted sales in summer resort regions, including Lake Tahoe, mid-Atlantic beaches (Rehoboth Beach, Myrtle Beach), and the Jersey shore areas,” Yun says.
Additionally, a recent NAR study confirms that many Americans continue to seek new living situations due to the coronavirus pandemic.