Sales of existing homes, the largest category in the U.S. housing market, jumped to their highest level in a year in September, signaling that the weakness of the first half of the year may be passing.
The National Association of Realtors said today that resales of previously occupied homes rose 2.4 percent to an annualized rate of 5.17 million units from a 5.05 million in August. The total was slightly more than the 5.10 million pace predicted in the Bloomberg survey of economist.
Sales were 1.7 percent lower on the year in September, nonetheless it was an improvement from August's 5.3 percent decline. It was the lowest annual drop since the two-year run-up in purchases petered out last July.
Housing starts and building permits, released last week, were both strong in September erasing declines in earlier months and indicating that the rising pace of home sales may be encouraging new construction.
Prospective buyers have likely been helped by falling mortgage rates. The nationwide average for a 30-year fixed rate mortgage was 3.93 percent yesterday, according to bankrate.com, the lowest in almost two years.
Americans returning to the real-estate market have also been assisted by the improving outlook in the labor market; employers have added 2 million workers to payrolls so far this year. The 5.9 percent unemployment rate in September was the lowest in more than six years.
Purchases rose in three of four national regions, led by a 7.1 percent gain in the West. Sales also rose in the Northeast and South but dropped in the Midwest.
Distressed sales, made up of foreclosures and short sales, in which the lender agrees to take less than the balance owed on the mortgage, made up 10 percent of the total.
First-time buyers, traditionally the mainstay of the housing market, have yet to return in full force. They were 29 percent of sales in September for a third month in a row, well below the historical average around 40 percent.
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