The US housing market continued its boom in September as existing homes sales grew 9.4 percent from the month before, a survey released Thursday said.
The 6.54 million seasonally adjusted annual rate of sales reported by the National Association of Realtors (NAR) was above expectations and 21 percent higher than the same month in 2019, with low interest rates and the upheavals of the coronavirus pandemic fueling a surge in home-buying.
“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” NAR Chief Economist Lawrence Yun said.
“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.”
Home buyers wasted no time in making up their minds, with more than seven in 10 homes sold in September on the market for less than a month.
Construction firms have struggled to keep up with the demand, with total inventory dropping to just under 1.5 million, a supply of 2.7 months at the current sales pace, which is a record low.
The scarcity pushed median housing prices up to $311,800, an increase of 14.8 percent from September 2019, with the gains seen across the United States.
“Prices will continue to rise rapidly, but sales likely are very close to peaking, given the flat trend in mortgage applications over the past couple months,” Ian Shepherdson of Pantheon Macroeconomics said.
The housing market has weathered the mass layoffs caused by the coronavirus pandemic because most buyers are older and with secure employment, Shepherdson said, though lending standards are now tightening.
“We doubt this will be enough to push activity down materially anytime soon, but we don’t expect further big gains in home sales.”