A thinning inventory added upward pressure to property values so far this year, but mortgage rates hovering near all-time lows kept the prospect of buying a home affordable.
Last month, the number of homes in the national supply declined 29.3 percent from September 2011, according to a report from Redfin. Despite fewer options, home sales rose 4 percent during the same period, but fell 17 percent from August. However, the month-over-month decline is believed to be part of normal seasonal trends.
"September is usually the month that real estate goes on sale, like Christmas toys in January," said Redfin CEO Glenn Kelman. "Whatever didn't sell in the summer gets marked down for a September closing."
Buyers across the country appeared to be well aware of discounted prices, as 27 percent of homes put up for sale in September sold within two weeks, the report said. On a local basis, public property data indicates 55.9 percent of homes for sale in San Jose, California, sold within this time period. In contrast, homes in Boston were the slowest-selling, with less than 4 percent selling within two weeks.
Additionally, prospective homebuyers may be purchasing homes at a quicker rate to take advantage of affordable mortgage rates. A recent survey from Fannie Mae shows close to 33 percent of households expect fixed mortgage rates to increase significantly in the next 12 months, but for now, they remain close to record lows.
Rates show little change so far this month
During the week ending October 11, the average rate for a 30-year FRM edged higher to 3.39 percent, from 3.36 percent a week earlier, according to a report from Freddie Mac. In addition, 15-year fixed-rate mortgages hit 2.7 percent, a slight increase from 2.69 percent.
"Mortgage rates were little changed this holiday week following the employment report for September," said Freddie Mac vice president and chief economist Frank Nothaft. "Payroll employment increased by 114,000 workers, although manufacturing jobs dipped for the second month in a row."
Meanwhile, five- and one-year Treasury-indexed hybrid adjustable-rate mortgages rose to 2.73 and 2.59 percent, respectively, the report said.
Despite gains across the board, the recent implementation of QE3 by the Federal Reserve is expected to hold rates near current levels until at least 2015.