Existing-Home Sales Jump 3.1%
Sales of existing U.S. homes unexpectedly surged 3.1% in September, boosted by low mortgage rates, and would have been even brisker had hurricanes not hit the South, a trade association said Monday.
Sales of previously owned homes rose to a seasonally adjusted annual rate of 6.75 million units last month from an upwardly revised 6.55-million unit pace in August, the National Assn. of Realtors said.
Analysts had been expecting a drop to a 6.51-million unit rate.
“We’ve had a dramatic fall in 30-year fixed mortgage rates over the last several months, and that’s created a very favorable backdrop for housing,” said David Lereah, chief economist for the Realtors group.
September’s pace was the third-highest on record and would have been even stronger had hurricanes not ripped through the Southeast during the month, the group said.
Sales edged down by 0.7% in the South, the only region of the country that posted a decline.
“I would expect that October numbers will reflect the missed opportunities in the South in terms of home buying,” Lereah said. Applications for mortgages, declining mortgage interest rates and new home sales point to strong housing activity for the next several months, he said.
The national average interest rate for the popular 30-year home loan fell to 5.69% last week, marking the second straight weekly decline, mortgage finance company Freddie Mac said Thursday. Mortgage rates have been moving downward since mid-June.
The national median home price was up 8.6% from the same month a year earlier to $186,600, the Realtor association’s report showed.
Inventories remained tight. The number of homes available for sale at the current pace fell to a 4.4-month supply from 4.5 months in August.
The mortgage and housing industries have forecast that minority families’ demand for housing will grow more quickly than that of white families in the coming years, according to Fannie Mae Chief Executive Franklin Raines and Freddie Mac CEO Richard Syron.
“We know that minorities will represent 80% of the population growth this decade -- and that 46% of future first-time home buyers will be minorities and immigrants,” Raines said at a San Francisco conference sponsored by the Mortgage Bankers Assn.
To meet that demand, Fannie Mae and Freddie Mac are stepping up their efforts to increase funding of loans to lower-income and minority home buyers, the companies’ CEOs said Monday.
