After reaching a two-year high in the previous month, existing home sales in the U.S. showed a modest pullback in the month of September, according to a report released by the National Association of Realtors on Friday.
NAR said existing home sales fell 1.7 percent to a seasonally adjusted annual rate of 4.75 million in September from an upwardly revised 4.83 million in August. With the drop, the annual rate matched the expectations of economists.
The annual rate of existing home sales for August was upwardly revised from the 4.82 million originally reported and represents the highest rate since May of 2010.
Despite the monthly pullback, NAR noted that the annual rate of existing home sales in September is up 11.0 percent from 4.28 million in the same month a year ago.
Lawrence Yun, NAR chief economist, said, "Despite occasional month-to-month setbacks, we're experiencing a genuine recovery."
"More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest," he added. "Rather, inventory shortages are limiting sales, notably in parts of the West."
The report said the national median existing home price came in at $183,900 in September, down 0.5 percent from $184,900 in August but up 11.3 percent from $165,300 a year ago.
NAR noted that home prices saw year-over-year growth for the seventh consecutive month, marking the first time that there were seven straight months of year-over-year growth since the period from November of 2005 to May of 2006.
Distressed homes accounted for 24 percent of September sales, up from 22 percent in August but down from 30 percent in September of 2011.
The report also showed that there were 2.32 million existing homes available for sale at the end of September, down from 2.40 million in August.
Housing inventory at the end September represents 5.9 months of supply at the current sales pace compared to 6.0 months of supply at the end of August.
"The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless home builders robustly ramp up production," Yun said.
The Commerce Department released a separate report on Wednesday showing a substantial increase in housing starts in the month of September.
The report said housing starts jumped 15 percent to an annual rate of 872,000 in September from the revised August estimate of 758,000. Economists had expected starts to climb to 765,000 from the 750,000 originally reported for the previous month.
With the much stronger than expected monthly growth, the annual rate of housing starts reached its highest level since July of 2008.
Building permits, an indicator of future housing demand, also surged up by 11.6 percent to an annual rate of 894,000 in September from the revised August rate of 801,000. The increase also lifted building permits to the highest level since July of 2008.
by RTT Staff Writer
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