Existing home sales jumped 10 percent in September, the biggest monthly jump on record and a signal that the housing market may be returning to a normal sales pattern post-$8,000 federal tax credit.
Existing Home Sales counts home resales (i.e. not new construction) and 80 percent of home resales close within 45-60 days. It’s no surprise, therefore, September’s data is strong.
Throughout the July and August, mortgage rates were in free-fall, pushing home affordability to near-record levels. Concurrently, the number of homes available for sale climbed to multi-year highs.
“Deals” were in ample supply this summer and eager Chicago home buyers snatched them up.
Some of these deals included “distressed properties”, a categorization that includes homes in various stages of foreclosure or short sale, accounted for 35 percent of all sales, an uptick of 1 percent from August.
According to the National Association of Realtors®, home resales split as follows:
- First-time buyers : 32 percent of all buyers
- Repeat home buyers : 50 percent of all buyers
- Investors : 18 percent of all buyers
By contrast, in November 2009, first-timers accounted for more than half of all resales.
For home buyers, September’s Existing Home Sales report foreshadows a more competitive housing market through the New Year. In addition to rising sales volume, home supplies are down by nearly 2 months from July.
At the current pace of sales, the complete housing stock would be depleted in 10.7 months.
