First Time Home Buyers Drive Housing Gains

First Time Home Buyers Drive Housing Gains

Existing-home sales rebounded in September as first-time home buyers flooded the market. Sales to first-time home buyers topped a 34 percent share in September, the highest in more than four years, according to the National Association of REALTORS®.

Total existing-home sales – which are completed transactions for single-family homes, townhomes, condos, and co-ops – rose 3.2 percent in September month-over-month to a seasonally adjusted annual rate of 5.47 million, NAR reported Thursday. Sales are now at the highest pace since June (5.57 million) and are 0.6 percent higher than a year ago (5.44 million). All major regions across the U.S. saw a pick up in closings last month, NAR reports.

  • West: existing-home sales surged 5 percent to an annual rate of 1.25 million in September, and are now 1.6 percent higher than a year ago. Median price: $345,400, up 8.1 percent from a year ago.

Source: National Association of REALTORS®

First-time home buyers were behind most of that sales momentum last month, NAR reports.

“There’s hope the leap in sales to first-time buyers can stick through the rest of the year and into next spring,” says Lawrence Yun, NAR’s chief economist. “The market fundamentals – primarily consistent job gains and affordable mortgage rates – are there for the steady rise in first-timers needed to finally reverse the decline in the home ownership rate.” 

Still, the limited number of homes for sale on the market could prove a big roadblock.

“The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale,” Yun adds. “Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time home owners to buy last month.”

5 Key Housing Stats

Here are a few key housing indicators from NAR’s September National housing report:

1. Home prices: The median existing-home price for all housing types last month was $234,200, a 5.6 percent year-over-year increase.

2. Days on the market: Forty-four percent of homes sold in September were on the market for less than a month. Properties stayed on the market an average of 39 days last month, down from 49 days a year ago. Short sales spent the longest time on the market at a median of 118 days; foreclosures sold in 67 days; and non-distressed homes sold in 38 days.

3. Distressed sales: Foreclosures and short sales dropped to a new low in September, comprising 4 percent of sales. That is down from 7 percent a year ago. In September, 3 percent of sales were foreclosures and 1 percent were short sales. On average, foreclosures sold for a discount of 15 percent below market value while short sales were discounted 11 percent.

4. Cash sales: All-cash sales comprised 21 percent of transactions last month, down from 24 percent a year ago. Individual investors make up the biggest bulk of cash sales. They purchased 14 percent of homes in September, up from 13 percent a year ago.

5. Inventories: More housing stock was added to the market by the end of September, up 1.5 percent month-over-month, but inventories are still 6.8 percent lower than a year ago. Unsold inventory dropped to a 4.5-month supply at the current sales pace.

“Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in,” Yun says. “Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.” 


Source:  First-Time Buyers behind Housing Gains, Realtormag.Realtor.org (10/2016).




Matt Pennington Headshot
Author:
Phone: 480-251-0280
Dated: October 21st 2016
Views: 282
About Matt: Matt has been a licensed Real Estate Broker since 2003 and with American AllStar Realty since 2005. ...

Property Search








RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

Phoenix Cities In The West Continue To Lead The Housing Price Increase - Spurred by increasing employment
Jun 11 2018 14278 1 -   Millennials Are Skipping
Bank Owned Investment Opportunity - If you're looking for a great
Memorial Day - Today we remember the brave

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

American AllStar Realty
6642 E Baseline Rd Ste 101
Mesa, AZ
602-353-7375