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.