Home Sales Surge 10 Percent In September

Despite the lack of any kind of tax incentive, which boosted sales earlier this year, sales of existing homes shot up ten percent in September, according to the National Association of Realtors.

It's the strongest sign of life in the housing market since the expiration of the homebuyers' tax credit.

Completed sales of single-family, townhomes, condominiums and co-ops, jumped 10.0 percent to a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August.

While its a big improvement, sales remain 19.1 percent below the 5.60 million-unit pace in September 2009 when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.

"A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium," said NAR's chief economist, Lawrence Yun. "But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions."

Regional breakdown

Sales were up in all parts of the country, with the biggest jump in the Midwest, where sales rose 14.5 percent in September to a level of 950,000 but are 26.4 percent below a year ago. The median price in the Midwest was $139,700, down 5.2 percent from September 2009.

Sales rose 10.6 percent in the south to an annual pace of 1.77 million in September but are 14.9 percent lower than September 2009. The median price in the South was $149,500, down 2.6 percent from a year ago.

Sales in the Northeast increased 10.1 percent to an annual pace of 760,000 in September but are 20.8 percent below September 2009. The median price in the Northeast was $239,200, which is 1.4 percent below a year ago.

Existing-home sales in the West increased 5.0 percent to an annual level of 1.05 million in September but are 16.7 percent below a year ago. The median price in the West was $213,600, which is 4.9 percent lower than September 2009.

The national median existing-home price for all housing types was $171,700 in September, which is 2.4 percent below a year ago. Distressed homes3 accounted for 35 percent of sales in September compared with 34 percent in August; they were 29 percent in September 2009.

Interest rates continue to make home purchases more attractive. According to Freddie Mac, the national average rate on a 30-year fixed rate mortgage was a record low 4.35 in September.