Potential home buyers can reach the limit of what they can afford. Upcoming home sales, a measure of signed contracts for existing homes, fell 2.2% in September compared to August, according to the National Brokers Association.
This was the first monthly drop in 4 months. Analysts had expected a small monthly profit. Upcoming sales were 20.5% higher annually.
The Northeast, which sees a different urban flight from New York amid the coronavirus pandemic, was the only region to make a profit. Sales rose 2 percent month-on-month and 27.7 percent year-on-year.
In the Midwest, expected sales decreased by 3.2% per month, but increased by 1
Upcoming home sales in the south decreased by 3% per month and increased by 19.6% per year. In the West, sales fell by 2.6% per month and increased by 19.3% compared to the previous year.
“With persistently low interest rates and some degree of continued job recovery, more contract signings are expected in the near future,” said Lawrence Yun, NAR’s chief economist. “In addition, there will be a constant demand for second-tier, as homeowners who have not considered moving before the pandemic enter the market.”
Demand will continue to grow as homeowners who have not considered moving before the pandemic begin to enter the market.
However, affordability clearly plays a role in the September retreat. Mortgage rates, which set record levels in August, rose slightly higher in September and remained there throughout the month. While interest rates are still historically low, house price growth accelerated dramatically in the summer as demand outpaced supply.
“The benefits of low interest rates have been completely erased by the sharp rise in prices, especially in expensive urban markets,” said George Ratiu, a senior economist at realtor.com, noting that the contracts signed in September contributed to a double-digit decline in inventory. per year. “As a result, we can expect affordability to play a much bigger role in housing in the coming months, as wage growth cannot keep pace with rising housing prices.”
Stocks are starting to increase quite slightly now, but most are expecting next spring for some real change in the market.
“I think we’ll see a lot more stock than usual in the spring of 2021,” said David Fogg, a real estate agent in Burbank, California. “You will have all the planned sellers for 2021, as well as most of the planned sellers for 2020, who postpone their movement for one year. Also, based on the call level, I think you’ll see more new planned vendors in California than ever before. “