Potential home buyers may reach the limit of affordability. According to data from the National Association of Realtors, sales of homes for sale (measured by the number of signed contracts for existing homes) fell 2.2% in September compared to August.
This is the first monthly decline in 4 months. Analysts had expected a small monthly increase. Pending sales increase by 20.5% annually.
In the Northeast, during the coronavirus pandemic, New York City has obvious urban escapes and is the only area that has seen growth. Sales for the month increased by 2% and an annual increase of 27.7%.
In the Midwest region, pending sales fell 3.2% per month, but increased 1
Sales of homes for sale in the South are down by 3% each month and are increasing by 19.6% each year. In the West, sales fell by 2.6% per month, and increased by 19.3% over the same period last year.
NAR chief economist Lawrence Yun (Lawrence Yun) said: “Due to the continued downturn in mortgage interest rates and a certain degree of continued employment recovery, it is expected that more contracts will be signed in the near future. Homeowners considering relocation are beginning to enter the market, so secondary demand will rise steadily. “
As homeowners who have not considered relocating before the pandemic begin to enter the market, demand will rise steadily.
However, affordability clearly played a role in the September correction. Mortgage rates, which were record lows in August, rebounded slightly in September and remained unchanged throughout the month. Although interest rates are still at historically low levels, as demand has greatly exceeded supply, housing prices have risen sharply throughout the summer.
George Ratiu, a senior economist at realtor.com, said: “The benefits of low interest rates have been completely eliminated by sharply rising prices, especially in expensive urban markets,” he pointed out in September. Contracted houses contributed to double-digit growth. Annual inventory declines. “Therefore, we can expect that in the coming months, affordability will play a greater role in housing, because wage growth cannot keep up with rising housing prices.”
Now inventories have started to pick up slightly, but most people hope that there will be any real changes in the market next spring.
David Fogg, a real estate agent in Burbank, California, said: “I think we will see more inventory than ever before in the spring of 2021.” “You will have all the sellers of the 2021 plan and most Plan sellers in 2020, they postponed the transaction for a year. And, based on my call volume, I think you will see more new plan sellers in California than ever before.”