US home sales bounced back in September, near 8 year high

PUBLISHED : Tuesday, 27 October, 2015, 7:01pm
UPDATED : Tuesday, 27 October, 2015, 7:01pm
AP

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Existing home sales in the US bounced back in September and drew close to an eight-year high as moderating price increases coaxed prospective buyers to close deals, the National Association of Realtors said last week.

Sales increased 4.7 per cent to a seasonally adjusted annual rate of 5.55 million, solidly above the 5.39 million pace expected by economists. August sales were revised down marginally to an annual pace of 5.3 million. Sales reached an eight-year high of 5.58 million in July before sliding back in August.

The median home price was US$221,900 in September, up 6.1 per cent from a year ago.

“While current price growth… 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, chief economist of the realtors group. The market also has been buoyed by low mortgage rates and healthy job growth.

At the same time, tight supplies have pushed up prices, prodding buyers to put their homes on the market. The inventory of unsold homes fell to a 4.8-month supply from 5.1 months in August. A six-month supply is generally considered balanced. The limited housing stock and rising prices discouraged buyers early in the year but moderating prices have underpinned sales recently.

Yet first-time home buyers continued to lag, falling to 29 per cent of all sales after rising to 32 per cent in August, the highest level of the year. Before the housing crash and recession, first-time buyers typically comprised 40 per cent of the market.

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