Housing Market Update for September 2019

MortgageUpdate

Interest rates are dropping, home price increases are slowing, and fear that a recession could be just around the corner are just some of the factors impacting the housing market and the US economy this September.

The good news? Existing home sales rose by 1.3% in August. Sales rose in the northeast, the midwest, and the south, while sales in the west declined. Year-over-year sales were up in all four major regions with sales strongest in the south. Median home prices increased over 2018 in most regions, with the exception of the northeast. The midwest saw the greatest gain in home prices.

September housing market: the numbers

  • 1.3% – The increase in home sales from July to a seasonally adjusted rate of 5.49 million in August, up 2.6% year-over-year
  • $280,700 – The median existing single-family home price for August, up by 4.7% year-over-year
  • 4.90 million – The seasonally adjusted annual rate of sales of single-family homes in August, up from 4.84 million in July and up 2.9% year-over-year
  • $257,600 – The median price for existing condos in August, up by 5.2% year-over-year
  • 90 – The number of months in which the median price of all existing housing types has increased
  • 5.49 million – The seasonally adjusted annual rate of sales in August of single-family homes, condos, and co-ops, up 1.3% in July and up 2.6% or 5.35 million year-over-year
  • 31 – The number of days a home remained on the market in August, up from 29 days in July and 29 days year-over-year
  • 49 – The percentage of homes sold in August that were on the market for less than a month
  • 1.86 million – Total housing inventory at the end of August, down from 1.90 million in July, a 2.6% decrease from 1.91 million year-over-year
  • 4.1 – The number of months worth of inventory available at current sale pace in August, down from 4.2 months in July and down from 4.3 year-over-year
  • 31 – The percentage of sales in August that were to first-time homebuyers, down from 32% in July and 33% year-over-year
  • 19 – The percentage of purchases made with cash in August and July down from 20% year-over-year
  • 2 – The percentage of sales in August that were distressed sales, remaining the same as July but down by 3% year-over-year

It’s clear the drop in interest rates in July helped to energize the housing market in August. And, while September saw another quarter of a percentage point drop — the Fed interest rate is now set in a range of 1.75 to 2% — Jerome Powell and members of the FED board don’t see rates falling lower than 1.5 to 1.75 percent through the end of 2022.

Will low interest rates be enough?

While the overall economy remains relatively strong, there are signs that a recession may be in the offing. The rate of inflation stands at 1.5%, down from 1.9% year-over-year. The number of new jobs remains solid and unemployment low. However, investments by businesses and US exports show signs of weakening. US GDP growth declined from 3.1% in the first quarter to 2.0% for the quarter ending in June. Household spending continues to rise and the stock market remains volatile, with some analysts suggesting a decline in commodities is imminent.

The European economy has slowed considerably. Germany, the EU’s strongest economy, is seeing steep declines in manufacturing and may be on the verge of a recession. Despite changes in leadership, the UK faces an October 31st Brexit deadline — still with no trade deal in sight. Meanwhile, we’re heading into an election season with increased talk of impeachment, a growing deficit, and an unresolved trade dispute with China. How all of this will impact housing in the final quarter of 2019 and beyond remains to be seen. Stay tuned.

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By Tim Coutis / September 27th, 2019 / Categories: / Tags:

Tim Coutis

A freelance writer and content creator, Tim Coutis has served as a Creative Director and Project Manager for a number of both large and small businesses in the finance space. In addition to creating content on a range of topics, his work includes traditional as well as online marketing, blog posts and social media support. Connect with him at timcoutis.com