Sales of existing homes in the United States soared 4.7% in September, the second highest level seen since 2007. The surge is a positive sign that the residential real estate market is recovering and will help support growth in the US’s economy.
Existing home closings reached a 5.55 million annualized rate, according to the National Association of Realtors. Purchases of single-family homes were the primary cause of the increase.
Improved job security and increasing property values are making Americans more confident in the real estate market.
Economists surveyed by Bloomberg were calling for 5.39 million. August’s rate was revised down from 5.31 million to just 5.3 million.
Compared to the previous year, home purchases increased 8% in the month of September. Median prices of existing homes also increased 6.1% to $221,900, up from $209,100.
Housing inventory is shrinking, as the number of existing properties declined 2.6% to just 2.21 million. Unsold home inventory was also down from 2.28 million seen a year earlier.
Approximately 29% of September home sales were from first-time buyers, which is below the average of 40%.
While homebuyers are still coming into the market, first-time homebuyers are still struggling to get in.
The purchase of existing homes climbed in all four regions, but the Northeast lead in sales with an 8.6% jump. Sales were up 3.8% in the South, 6.7% in the West, and 2.3% in the Midwest.