Surprising drop in home sales in September as buyers can be priced

You can see a pending sign in front of my house in Miami, Florida.

Joe Ladle | Getty Images

Potential homebuyers may have reached the limits of what they can buy. According to the National Association of Real Estate Agents, pending home sales, an indicator of existing home contracts, fell 2.2% in September compared to August.

It was the first monthly decrease in 4 months. Analysts expected a small monthly profit. Pending sales increased by 20.5% each year.

The northeastern part of the coronavirus pandemic, with a clear city flight from New York City, was the only region that made a profit. That month’s sales increased by 2%, increasing by 27.7% each year.

In the Midwest, pending sales fell 3.2% each month, but increased 18.5% from September 2019.

Pending home sales in the South fell 3% a month and increased 19.6% a year. In Europe and the United States, monthly sales fell 2.6%, up 19.3% from a year ago.

“More contracts are expected in the near future as mortgage rates are persistently low and employment is recovering to some extent,” said Lawrence Yun, chief economist at the National Association of Realtors. .. “In addition, as a homeowner who wasn’t thinking about moving before the pandemic entered the market, there will be steady secondary demand.”

But affordability is clearly affecting the September pullback. Mortgage rates, which hit record lows in August, rose slightly in September and stayed there for a month. While interest rates are still historically low, house price rises accelerated dramatically in the summer as demand far exceeded supply.

“The benefits of low interest rates have been completely lost due to sharp price increases, especially in high-value urban markets,” said George Latiu, senior economist at Said that he made a double-digit contribution. Annual inventory reduction. “As a result, we can expect affordable prices to play a much bigger role in homes over the next few months, as wage growth cannot keep up with rising home prices.”

Inventories are starting to pick up slightly, but most people expect actual changes in the market next spring.

“I think we’ll see much more inventories in the spring of 2021 than usual,” said David Fogg, a realtor in Burbank, California. “All planned sellers in 2021 and most of the planned sellers in 2020 will be postponed for one year, and based on my phone level, there are more new planned sellers in California than ever before. I think it will be done .. ”

Surprising drop in home sales in September as buyers can be priced

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