New single-family home sales surged in September to their highest level in nearly 2-1/2 years, further evidence the housing market recovery is improving.
The Commerce Department said on Wednesday sales increased 5.7 percent to a seasonally adjusted 389,000-unit annual rate – the highest level we’ve seen since April 2010, when sales were boosted by a tax credit for first-time homebuyers.
Though August’s sales pace was revised down to a 368,000-unit pace from the previously reported 373,000 units nationwide, the report was still relatively strong, with the median home price of a new home rising 11.7 percent from a year ago.
While the increase in sales last month added to signs of a housing market recovery, new home sales are just over 25% of their peak in July 2005. Compared to September of last year, new home sales were up 27.1 percent.
The housing market is finally on the mend after collapsing in 2006 and dragging the national economy through its worst recession since the Great Depression. Home sales are increasing, giving a modest lift to home prices and builders’ confidence to take on new projects. (Something that we’re seeing an abundance of in the Heights.)
The recovery in the housing sector is being supported by record-low mortgage rates, which have been held down by the Federal Reserve.
The U.S. central bank announced last month that it would buy $40 billion in mortgage-backed securities per month until the outlook for employment improved significantly, hoping that the housing market will be the vehicle to improve the economy.
Though the inventory of new listings on the market rose 1.4 percent in September, it remained near record lows.
If the pace continues at September’s sales rate, it would take 4.5 months to clear the current inventory on the market, the lowest since October 2005, down from 4.7 months in August of this year. Sales last month were up in three of the four national regions, but they fell 37.3 percent in the Midwest.
It’s great to finally get some good news on a national level about the housing market. Keep in mind, dear reader, that the real estate market is always locally driven and neighborhood specific. Much of the downturn the rest of the nation felt over the past few years was not experienced in the Houston Heights. We’ve been very fortunate to have a diverse economy in Houston that has kept our lows from being terribly low and has seemed to lead the rest of the nation into substantial highs.
The housing market in the Heights is at an all-time high, with inventory above $500K at a staggering low. We are experiencing multiple bids and back-up contracts at a near record rate.
If you’re considering making a move, now is the time to do it!