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Existing-Home Sales Rebound from Late-Summer Decline

for-saleSales of existing homes rebounded in September following a dip in August, coming back to post their highest annual pace so far this year.

Total existing-home sales, including single-family homes, townhouses, condominiums, and co-ops, inched up 2.4 percent in September to a seasonally adjusted rate of 5.17 million, the National Association of Realtors (NAR) reported Tuesday. August sales were at a rate of 5.05 million, down nearly 2 percent from July.

"Low interest rates and price gains holding steady led to September's healthy increase, even with investor activity remaining on par with last month's marked decline," said NAR Chief Economist Lawrence Yun. "Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline in choices due to the fact that inventory generally falls heading into winter."

While September's sales rate marks a 2014 high, transaction volume remained down 1.7 percent compared to last September's annual sales rate of 5.26 million units.

The median home price for all existing housing types last month was $209,700, an increase of 5.6 percent over September 2013 but a step back from August's reported price of $219,800. Existing-home prices have climbed annually for 31 straight months.

With prices on the rise, mortgage rates continue to descend, recently settling in at their lowest level in more than a year, helping to boost affordability. Still, inventory shortages and financial stress are putting a damper on activity from first-time homebuyers, who accounted for 29 percent of September sales. First-time buyers have represented less than 30 percent of all buyers for 17 of the past 18 months, NAR says.

Meanwhile, all-cash sales were 24 percent of transactions in September, up slightly from August but down from approximately one-third in September 2013. Individual investors, who account for most cash sales, purchased 14 percent of homes last month.

Three of the country's four major regions posted monthly gains in existing-home sales last month. According to NAR, sales were up 1.5 percent in the Northeast to an annual rate of 680,000; 5.0 percent in the South to a rate of 2.12 million; and 7.1 percent in the West to a rate of 1.2 million. Only the Midwest reported a decline, with sales falling 5.6 percent to 1.17 million.

Compared to last year, all regions except the South posted decreases. Sales in that region were up 1.4 percent compared to declines of 1.4 percent in the Northeast, 4.9 percent in the Midwest, and 4 percent in the West.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
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