Existing-Home Sales Rise by 7% in September 2021, Surpassing Estimates

The median price (MP) for a US family home stood at $352,800 in September 2021, a decline in the MP. The last time the MP of a family home was at this level was November 2020, increasing ever since (in April 2021, it was $376,600, and in August 2021, $390,900).

Nevertheless, home sales increased by seven percent in September compared to August, rising to an adjusted annual figure of 6,300,000 units sold throughout the US. However, this figure is 2.3% less than the volume sold in August of 2020 and indicates two real estate trends:

1 The US economy is growing as people buy more homes.

2 The MP of every purchase reflects a declining tendency.

(Statistics used include co-ops, condos, townhouses & detached houses)

Arguments for these real estate trends in 2021

The price spike could be due to more offers entering the market. After a significant weakening of construction activity due to recent pandemics, the pace of new home commissioning rose by the end of 2021. And it’s anticipated that more new offers will enter the market in 2022. A big part of those offers is in the medium segment, which could explain the dip in the MP, as construction companies want to increase their cash turnover, recovering from bottlenecks in supply chains.

Another reason is that low mortgage interest rates come to an end soon, and people are rushing to secure their home purchases before a predicted interest rate rises. This has already started and is expected to continue in early 2022. Applications for 30-year mortgages have increased, contributing to halting the future demand. According to recent data, the mortgage interest rate in September 2021 was at its 6-month peak. It is expected that the US economy will recover further in 2022, so the 6-month should easily transform into 9-month and 12-month peaks.

In the previously mentioned statistics, the average home receives an offer within 17 days compared to twenty-one days a year earlier. 86% of these offers are accepted after being on the market for less than one month. To predict the time from offer to sale, this should take 2.4 months. Compare this figure to 2.7 months in September 2020 and 4 months during the peak of the Covid pandemic. Neither of these numbers is bad; according to realtors, any number below 5 months indicates a tight market.

Apart from southern parts of the US, sales in the housing market have increased yearly. In the South, they remain unchanged or are in decline.

As for price segments, the most significant increase is seen in the upper and medium price segments. Sales of properties with a price tag of less than $250,000 are declining. This could also signify that buyers want better housing conditions for their families and themselves, so they’re ready to upgrade today while the affordability of mortgage interest remains. The share of first-time purchasers in September was 28%.

Conclusion about real estate price trends

April, May and June 2020 delivered some of the worst figures in the price of homes. From July 2020, the situation began to improve and has been growing ever since. Since August 2021 (or June – depending on which numbers to take for the analysis; we’ve taken ones retrieved from the United States Census Bureau, www.usa.gov), we see a steady decline in the MP of homes. However, the US house market enters 2022 in a strong position with all the basics required for growth.

Thus, if our reader hasn’t yet purchased a new home for their family, it’s time to consider this before prices increase significantly.