According to the National Association of Realtors, existing-home sales in the U.S. grew for the fourth consecutive month in September 2020. Each of the four major regions witnessed month-over-month and year-over-year growth, with the Northeast seeing the highest climb in both categories.
Total existing-home sales rose 9.4% from August to a seasonally adjusted annual rate of 6.54 million in September. Overall sales rose year-over-year, up 20.9% from a year ago (5.41 million in September 2019).
"Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season," said Lawrence Yun, NAR's chief economist. "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 September 2019 ($271,500), as prices rose in every region. September's national price increase marks 103 straight months of year-over-year gains.
Total housing inventory at the end of September totaled 1.47 million units, down 1.3% from August and down 19.2% from one year ago (1.82 million). Unsold inventory sits at a 2.7-month supply at the current sales pace, down from 3.0 months in August and down from the 4.0-month figure recorded in September 2019.
"There is no shortage of hopeful, potential buyers, but inventory is historically low," Yun said. "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 said.
Additionally, a recent NAR study confirms that many Americans continue to seek new living situations due to the coronavirus pandemic.
Properties typically remained on the market for 21 days in September - an all-time low - seasonally down from 22 days in August and down from 32 days in September 2019. Seventy-one percent of homes sold in September 2020 were on the market for less than a month.
First-time buyers were responsible for 31% of sales in September, down from the 33% in both August 2020 and September 2019. NAR's 2019 Profile of Home Buyers and Sellers - released in late 2019 - revealed that the annual share of first-time buyers was 33%.
Individual investors or second-home buyers, who account for many cash sales, purchased 12% of homes in September, a small decline from the 14% figure recorded in both August 2020 and September 2019. All-cash sales accounted for 18% of transactions in September, unchanged from August but up from 17% in September 2019.
Distressed sales - foreclosures and short sales - represented less than 1% of sales in September, equal to August's percentage but down from 2% in September 2019.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 2.89% in September, down from 2.94% in August. The average commitment rate across all of 2019 was 3.94%. Single-family and Condo/Co-op Sales
Single-family home sales sat at a seasonally adjusted annual rate of 5.87 million in September, up 9.7% from 5.35 million in August, and up 21.8% from one year ago. The median existing single-family home price was $316,200 in September, up 15.2% from September 2019.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 670,000 units in September, up 6.3% from August and up 13.6% from one year ago. The median existing condo price was $272,700 in September, an increase of 9.9% from a year ago.
The Mortgage Bankers Association's SVP and Chief Economist Mike Fratantoni also commented on NAR's latest numbers with, "Existing-home sales jumped in September, rising to their fastest pace since before the financial crisis, and up more than 20 percent compared to last year. Contributing to this surge in sales activity is an improving job market, low rates, and families across the country looking for more - or different - space. The primary constraint to even more sales is the plummeting inventory of homes on the market, which is leading to bidding wars and spikes in home prices across the country. Fortunately, we are seeing a pickup in the pace of construction, which should bring more inventory onto the market for next year's buyers. This positive report aligns with MBA's 2021 forecast for a record year of purchase originations.
"Typical seasonal patterns for home sales have likely been thrown off as a result of this crisis. Sales that would have normally occurred in the summer have likely been pushed into the fall, and this may account for some of the extremely fast pace of existing sales on a seasonally adjusted basis."
Regional Housing Breakdown
For four straight months, home sales have grown in every region compared to the previous month. Median home prices increased at double-digit rates in each of the four major regions from one year ago.
September 2020 saw existing-home sales in the Northeast jump 16.2%, recording an annual rate of 860,000, a 22.9% increase from a year ago. The median price in the Northeast was $354,600, up 17.8% from September 2019.
Existing-home sales grew 7.1% in the Midwest to an annual rate of 1,510,000 in September, up 19.8% from a year ago. The median price in the Midwest was $243,100, a 14.8% increase from September 2019.
Existing-home sales in the South increased 8.5% to an annual rate of 2.80 million in September, up 22.3% from the same time one year ago. The median price in the South was $266,900, a 13.0% increase from a year ago.
Existing-home sales in the West rose 9.6% to an annual rate of 1,370,000 in September, an 18.1% increase from a year ago. The median price in the West was $470,800, up 17.1% from September 2019.