Realtor.com reported This Week in Real Estate that homes sold 12 days faster in September than they did September of 2019. Below are a few newsworthy events from the final few days of September and first days of October that influence our business:
Pending Home Sales Hit All-Time High in August, Spike to 8.8 Percent. According to the National Association of Realtors, pending U.S. home sales in August 2020 continued to move upward, marking four uninterrupted months of positive contract activity. Each of the four major regions experienced growth in month-over-month and year-over-year pending home sales transactions. The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 8.8% to 132.8 – a record high – in August. Year-over-year, contract signings rose 24.2%. An index of 100 is equal to the level of contract activity in 2001. Realtor.com’s Housing Market Recovery Index, which reveals metro areas where the market has recovered or even exceeded its previous January levels, showed the greatest recoveries as of September 19 were in Seattle-Tacoma-Bellevue, Wash.; Las Vegas-Henderson-Paradise, Nev.; Boston-Cambridge-Newton, Mass.-N.H.; Denver-Aurora-Lakewood, Colo.; and Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. The Northeast PHSI grew 4.3% to 117.1 in August, a 26.0% jump from a year ago. In the Midwest, the index rose 8.6% to 124.5 last month, up 25.0% from August 2019. Pending home sales in the South increased 8.6% to an index of 154.2 in August, up 23.6% from August 2019. The index in the West rose 13.1% in August to 120.3, up 23.6% from a year ago.
Homes Sold Two Weeks Faster in September Due to Unusual Surge in Demand. In the first read on September demand, homes sold 12 days faster than they did a year ago, according to realtor.com. Homes usually sell 25% faster in September than at the start of the year, but this year they sold 39% faster. Regionally, properties in the Northeast spent 13 fewer days on the market than last year, while those in the South sold 11 days faster. In the Midwest it took nine fewer days to sell a home and seven fewer in the West. In the 50 largest metropolitan housing markets, the typical home sold in 44 days, 10 days faster than last year. “Many buyers tend to put their home search on hold after the start of the school year, but remote learning and the desire for more space continued to fuel buyer interest in September,” said Danielle Hale, chief economist at realtor.com. “Unseasonably high buyer interest coupled with historically low inventory and favorable mortgage rates are creating a perfect storm in the housing market.”
Strong Gains in August for Single-Family Construction. NAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate (SAAR) of $589.4 billion in August. It was up 3.7% over the upwardly revised July estimates. Total private residential construction spending was 6.7% higher than a year ago. Spending on single-family construction rose 5.5% to a $287.9 billion annual pace, supported by the increasing demand amid the record low mortgage rates.