National September & October 2009 Real Estate Figures
In addition to our post earlier this month about home statistics, more figures have recently been released regarding national home and real estate sales.
The National Association of Realtors report released on Monday showed that home sales surged for the second month in a row in October. Sales climbed to their highest level since July 2007 as first-time buyers rushed to take advantage of an expiring tax credit. Home sales nationwide are now up nearly 36% from their bottom in January,though they are still 16% below the peak in autumn 2005.
The National Association of Realtors said home resales rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million in October, from a downwardly revised pace of 5.54 million in September. It was the biggest monthly increase in a decade, and far above the 5.65 million pace expected by economists, according to Thomson Reuters.
The median sales price was $173,100, down 7% from October 2008 and off roughly 2% from September 2009. Sales were up 21% from October last year and were up in all four regions of the country, with the greatest gain a 26% increase of sales in the Midwest. At the current sales pace, there is a 7-month supply of homes on the market and in some areas there are bidding wars.
Two other reports came out on Tuesday regarding September home sales figures.
The Standard & Poor's/Case-Shiller home price index of 20 major cities rose only 0.3% to 144.96 in September, but it was the fourth straight monthly increase. The seasonally adjusted index is now up more than 3% from its bottom in May, but still 30% below its peak in April 2006. The report shows home prices rose in 11 major cities, with the strongest gains in San Francisco and Minneapolis (and Saint Paul).
Home prices are a key ingredient to rebuilding the economy. Homeowners feel wealthier when their property appreciates in value and are more likely to spend money. Rising prices also help millions of homeowners who owe more to the bank than their homes are worth.
Currently, roughly one in four homeowners are in that situation, according to First American CoreLogic, a real estate information company. And a record 14 percent of homeowners with a mortgage are either behind on their payments or in foreclosure, the Mortgage Bankers Association said last week.
Showing one of the strongest markets detailed in the report, prices in the Minneapolis - Saint Paul metro area ncreased 1.8% between August and September. Compared with last September, however, prices in the Twin Cities were down by 11.2%. September home prices in the local market were roughly comparable with where they stood back in September 2001, according to Case-Shiller.
Good for home buyers, but not necessarily for sellers!
Finally, calculated using home sales price information from Fannie Maeand Freddie Mac-acquired mortgages, the Federal Housing Finance Agency’s (FHFA) seasonally adjusted monthly house price index (HPI) for September was unchanged from August. The monthly change for the July-to-August period was revised to -0.5%, from an initial estimate of -0.3%. For the third quarter of 2009, U.S. house prices rose modestly. The HPI was 0.2% higher on a seasonally adjusted basis in the third quarter than in the second quarter of 2009. Over the past year, seasonally adjusted prices fell 3.8% from the third quarter of 2008 to the third quarter of 2009.
The housing recovery is being driven by lower prices in combination with federal programs to lower mortgage rates and bring more buyers into the market. This year's sales were also aided by an $8,000 federal tax credit for first time home buyers, which helped to increase sales significantly. Analysts expect prices to dip again this winter as foreclosures increase and economic growth remains modest.
Spring and summer are also typically the best times of the year for the housing market. Families prefer to move between school years. The holidays and cold weather discourage other people from moving during the winter months in the Midwest and in the Northeast. Fewer homeowners will put their properties on the market.