A push from first-time buyers reversed a two-month decline in existing-home sales in September, according to the National Association of Realtors (NAR).
The first-time buyer share of 34 percent in September was the highest in four years, and it pushed the pace of existing-home sales up by 3.2 percent to an adjusted annual rate of 5.47 million.
Will first-time buyers continue to drive existing-home sales upward in the face of shrinking inventory and rising prices? The industry will find out on Tuesday, November 22, when NAR publishes its October existing-home sales report.
“There's hope the leap in sales to first-time buyers can stick through the rest of the year and into next spring,” NAR Chief Economist Lawrence Yun said. “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 homeownership rate.”
Inventory remains an issue, however.
“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 said. “Unfortunately, there won't be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”
New Home Sales—HUD/Census Bureau, Wednesday, November 23
Sales of newly-constructed homes had a solid month in September, with a 3 percent increase over-the-month and a 30 percent increase over-the-year up to an annual rate of 593,000, according to a joint report from HUD and the Census Bureau.
New home sales were still well below their historical norms, however.
“If we look past the monthly volatility by using the 12-month rolling total of new home sales, September was the best month since August 2008,” said Trulia chief economist Ralph McLaughlin. “By historical standards, however, new home sales per household are still about 36 percent below the long-run average.”
Will they move up further toward that historical benchmark in October? HUD and the Census Bureau will release the October report on Wednesday, November 23.
This week’s schedule
Tuesday, November 22
Existing-home Sales for October 2016, NAR, 10 a.m. EST
Wednesday, November 23
Home Price Index for September 2016, FHFA, 9 a.m. EST
New Home Sales for October 2016, HUD/Census Bureau, 10 a.m. EST
Thursday, November 24