MW: ECONOMIC REPORT: Existing-home sales jump to 13-month high
Sales show first year-on-year gain in nearly three years
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - Boosted by foreclosures and plunging prices, sales of pre-owned homes and condos rose sharply in September to the highest level in 13 months, an industry trade group reported Friday.
Existing-home sales rose 5.5% to a seasonally adjusted annual rate of 5.18 million, the National Association of Realtors estimated Friday. Economists surveyed by MarketWatch expected sales to rise to a 5 million pace from 4.91 million in August. See Economic Calendar.
It was the largest monthly percentage increase in five years.
Sales of existing homes were 1.4% higher in September than they were a year earlier; it was the first year-on-year increase in nearly three years.
The figures measure home sales closed in September on sales contracts signed one or two months earlier. Credit was less available in late September after the global credit crunch tightened.
The median sales price fell 9% in the past year to $191,600, the lowest since April 2004. Prices plunged 18.5% in the West region, driven by rising foreclosures.
Distressed sales - such as short sales or foreclosures -- represent about 35% to 40% of total sales. Foreclosed homes sold at auction are not included in the sales figures.
The increase in sales could be a "first step" in a global recovery, said Lawrence Yun, chief economist for the real estate trade group. "The first step is for buyers to return to the marketplace," he said. Later, home prices can improve, leading to more confidence in mortgage-backed securities and in financial markets overall.
Inventories of unsold homes on the market fell 1.6% to 4.27 million, representing a 9.9-month supply at the September sales pace.
Sales of single-family homes rose 6.2% in September and are up 3.8% in the past year. Sales of condos were unchanged in September and are down 15.7% in the past year.
Sales soared 16.8% in September in the West and are up 34.4% in the past year. Sales rose 4.4% in the Midwest, and 2.2% in the South. Sales fell 1.2% in the Northeast.
