The housing market's recovery continued in September, despite a decline in existing-home sales month-over-month, as home prices stayed on an upward trend.
Real estate records showed that existing-home sales declined 1.7 percent in September to a seasonally-adjusted annual rate of 4.75 million units, according to the National Association of Realtors. While the drop occurred compared to August, it also represented an 11 percent gain from September 2011, which experienced a rate of 4.28 million.
"Despite occasional month-to-month setbacks, we're experiencing a genuine recovery," said Lawrence Yun, chief economist for the NAR. "More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West."
Housing inventory stood at 2.32 million existing properties on the market, 3.3 percent lower than the previous month's figures, the report said. Overall, this was a supply of 5.9 months, only slightly less than the previous month's figure.
Distressed property transactions increased to 24 percent of all sales during September, which was two points higher than August's figure, the NAR reported. However, the latest figure was a decline from September 2011, as distressed properties made up 30 percent of sales at that time.
Home prices continue improvement
Property data revealed the median home price for existing properties sold in September was $183,900, the association's report showed. This was more than 11 percent higher than the same month in 2011, as well as the seventh straight month where prices increased on an annual basis.
Approximately one-third of properties purchased went to first-time homebuyers, only slightly higher than the previous month, the report noted. The statistic was unchanged year-over-year.
The continued gains in home prices, combined with still-strong sales, suggest that the market is on track to a full recovery. Despite this, there are still some issues in the market that remain. Fannie Mae's Economic & Strategic Research Group noted that government issues such as the fiscal cliff and debt ceiling could affect further progress in the housing market heading into next year if something is not done. However, even with these variables, the housing market can still make some progress.