1st-Timers Buy into a Strong September
Existing-home sales from first-time buyers reached a four year high in September, at a 34 percent share, according to the National Association of Realtors®. Distressed sales fell to a new low of 4 percent of the market.
Lawrence Yun, NAR chief economist, says the two-month slump in existing sales has reversed course strongly. “The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale,” he said. “Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time homeowners to buy last month.”
The 5.6 percent gain over September 2015 ($221,700) marks the 55th consecutive month of year-over-year gains.
“Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in,” added Yun. “Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”
Matching the highest share since July 2012, first-time buyers made up 34 percent of sales in September. First-time buyers represented 30 percent of sales in all of 2015.
“There’s hope the leap in sales to first-time buyers can stick through the rest of the year and into next spring,” explained Yun. “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.”
Properties typically stayed on the market for 39 days in September, up from 36 days in August but down considerably from a year ago (49 days). Short sales were on the market the longest at a median of 118 days in September, while foreclosures sold in 67 days and non-distressed homes took 38 days. Forty-four percent of homes sold in September were on the market for less than a month.
The National Association of Realtors®, is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.