Sales of existing U.S. homes soared 9.4% in September, up nearly 21% from one year ago, the National Association of Realtors reported Thursday, as the pandemic has prompted Americans to opt for detached homes with large yards over living in crowded urban areas.
September marks the fourth consecutive month that existing home sales have increased this year.
“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” said Lawrence Yun, NAR’s chief economist, when releasing the report.
The median existing-home price for all housing types in September was $311,800, up 14.8% from September 2019.
While prices increased, the time a home was on the market shrank. The usual time a home sat unsold decreased in September, as 71% of homes sold within less than a month.
Properties typically remained on the market for 21 days in September — an all-time low.
Yun said that while there is an abundance of buyers, the shortened time frame for a home to be on the market lowered inventory.
Total housing inventory at the end of September was 1.47 million units, down 1.3% from August and down 19.2% from one year ago.
The low inventory of existing homes has prompted homebuilders to create more supply.
“To their credit, we have seen some homebuilders move to ramp up supply, but a need for even more production still exists,” Yun said.
Low interest rates have also helped to increase sales. A 30-year, conventional, fixed-rate mortgage decreased to 2.89% in September, down from 2.94% in August, according to Freddie Mac.
As the pandemic has forced people to work and be schooled from home, existing home sales in vacation destinations, such as Lake Tahoe or the mid-Atlantic beaches, have skyrocketed with a 34% year-over-year gain in September.
“The uncertainty about when the pandemic will end, coupled with the ability to work from home, appears to have boosted sales in summer resort region,” Yun said.
The recent NAR report found that the pandemic has prompted many Americans to seek detached homes with large yards.
Glenn Kelman, Redfin’s CEO, recently said that homebuying has shifted to rural areas and away from densely populated urban areas.
“Rural demand is much stronger right now than urban demand, and that’s a flip from where it’s been for the longest time, where everybody wanted to live in the city,” he told CNBC.
Chip Murphy, regional vice president of New York-based Hunt Real Estate, said buyers are looking for yards to provide space for a host of activities since backyards are the safest place to be outside.
“Buyers are looking for activities to keep them busy at home, which has resulted in the popularity of outdoor at-home hobbies like gardening and landscaping, bird-watching, and outdoor home improvements,” he said.
Joseph Zoppi, managing partner of Templar Real Estate in Princeton, New Jersey, said that people migrating to rural areas is happening nationwide.
“That’s a big, big trend. Super big. It’s big in a number of states right now,” he said.
