No More ‘Slow Season’ as Home Sales See Largest Numbers Since January 2020
Seasonality plays a vital role in the housing market, as it has a significant impact on the supply and demand of housing. Transactions and prices tend to be above trend in the summer while activity slows in the winter. This year, however, the housing market is still looking unusually strong in what’s typically considered the slower part of the year.
On Thursday, the National Association of Realtors reported that 6.29 million existing homes were sold in September, up from August’s 5.88 million, The Wall Street Journal reported. This is the best month since January, when 6.66 million homes were sold.
These numbers are all adjusted for seasonal swings. Unadjusted, the WSJ noted that September’s existing home sales were about 5% lower than in August, yet 50% higher than in January. This data suggests that buyers and sellers aren’t following the usual patterns. The WSJ pointed out that, as a result, real estate agents might be a lot busier in the fall and winter compared to pre-pandemic seasonal trends.
“Interest rates are at historic lows, there is a lot of demand for houses in the pandemic and there aren’t enough houses for people to buy,” Daryl Fairweather, chief economist at Redfin, told CNBC. Fairweather also noted that the last decade saw the fewest homes built in the U.S. since the 1960s. According to the WSJ, there were only 2.4 months of homes on the market in September, compared to 3.9 for the same month in 2019.
This could continue to put pressure on home prices. In September, the average home price was $377,000, according to real estate broker Redfin, reported CNBC. That’s up 14% compared to the same month last year and 30% from 2019.
The housing supply problem has been years in the making, the WSJ added, and it could be years before supply can keep up with demand.
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Last updated: October 22, 2021