Home sales rebounded in September

Existing-home sales rebounded in September to their second highest pace in eight years, with low mortgage rates and stable prices driving the increase. 

The National Association of Realtors (NAR) said Thursday said that sales, including single-family homes and condos, jumped 4.7 percent last month to a seasonally adjusted annual rate of 5.55 million, up from 5.3 million in August.

{mosads}Sales are up 8.8 percent compared with a year ago.

“While current price growth around 6 percent is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace,” said Lawrence Yun, the NAR chief economist.

A separate report from the National Association of Home Builders (NAHB) on Thursday credited a mix of steady employment and economic growth, pent-up demand, affordable home prices, and low mortgage rates for keeping the housing market on track for expansion into 2016. 

Improvement is expected amid persistent headwinds, with housing shortages and readily available labor, along with rising costs for materials, holding back a more robust recovery.

“This recovery is all about jobs,” said David Crowe, the NAHB chief economist. “If people can get good jobs that pay decent incomes, the housing market will continue to move forward.”

Another positive is that home equity has nearly doubled since 2011 and now stands at $12.5 trillion, Crowe said.

Home prices have continued ticking upward but at a slower pace. 

The median existing-home price for all housing types in September was $221,900, which is 6.1 percent above the September 2014 price of $209,100.

The Federal Housing Finance Agency reported Thursday that home prices rose 0.3 percent in August from the previous month.

The average rate for a 30-year, fixed-rate mortgage remained below 4 percent for the second consecutive month, declining slightly in September to 3.89 from 3.91 percent in August, down from 4.16 percent a year ago, according to Freddie Mac.

The market also is facing a dearth of homes on the market.

The number of homes for sale decreased 2.6 percent, to 2.21 million, or a 4.8-month supply at the current sales pace, down from 5.1 months in August.

“Despite persistent inventory shortages, the housing market has made great strides this year, backed by an increasing share of pent-up sellers realizing the increased equity they’ve gained from rising home prices and using it towards trading up or moving into a smaller home,” Yun said.

But first-time home buyers are struggling to get into the market.

Those buyers made up just 29 percent of sales in September after climbing to their highest share of the year in August, at 32 percent.

Distressed sales — foreclosures and short sales — remained at 7 percent in September for the third consecutive month and have fallen from 10 percent a year ago.

All four regions saw sales gains in September.

Sales increased 8.6 percent in the Northeast, 2.3 percent in the Midwest, 3.8 percent in the South and 6.7 percent in the West.