We are happy to report that U.S. homes sold at their fastest pace this past September than they have all year. The slowdown in the market seen mid-way through 2013 is making progress back to a faster pace. The National Association of Realtors reported on Tuesday that existing home sales have risen 2.4 percent from the previous months to a seasonally adjusted annual rate of 5.17 million.This past September only added further fuel to this growing market.
According to the NAR report, September sales have improved in the South and West compared to the prior month and continue to tick up in the Northeast. The share of purchases by investors fell to 14 percent from 19 percent a year ago. In spite of the recent departure of investors, existing homeowners have been offsetting the market. Many existing homeowners have been upgrading to more expensive properties or downsizing after raising their families which have added to the push of sales this past month.
As home prices continue to recover from the breakdown that took place in 2007, there have been adjustments made and action taken in hopes to repair it fully. The federal regulator that oversees Fannie Mae and Freddie Mac is considering an option to lower down payments, so that more individuals can qualify for a mortgage. Other action took place on Tuesday where the board of Federal Deposit Insurance Corp. voted 4-1 removing the requirement stating that borrowers must provide a 20 percent down payment if their bank doesnt hold on its book at least 5 percent of the mortgage securities tied to its home loans. Thus federal regulators loosening some credit regulations.
The market has seen a recent shift toward buyers. Chief economist, Nela, stated that additional homes may come on the market toward the end of the year as investors plan to sell for tax reasons, making conditions more preferable for buyers. Nela reported that only 44 percent of offers have faced bidding wars in October compared to the high of 75 percent in March of 2013.
One interesting fact also showed a shift towards renting with almost all of the gains coming from the recent building of apartments. In a report released by the Commerce Department last week, it shows that housing starts rose by 6.3 percent to a seasonally adjusted annual rate of 1.017 million homes. The construction of apartments has soared to 30.3 percent over the past year.
Despite the reach of home-buying historic averages, records suggest that the sales decline that began last year has ended.