Affordability has affected existing-home sales, just not in the way that everyone with an eye on the real estate market hopes for.
Instead, less inventory has sent prices upward, and homebuyers are purchasing existing-homes at a lower rate in September than in August, according to recent data from the National Association of Realtors. Overall, that figure has dropped 1.9 percent to a seasonally adjusted annual rate of 5.29 million units for September, down on a monthly basis.
"Affordability has fallen to a five-year low as home price increases easily outpaced income growth," explained Lawrence Yun, chief economist for NAR. "Expected rising mortgage interest rates will further lower affordability in upcoming months. Next month we may see some delays associated with the government shutdown."
Foreclosed houses and short sales comprised 14 percent of the month's total volume, a slight increase from August's 12 percent. Existing-homes are single-family homes, townhomes, condominiums and co-ops, and although the month-to-month sales figures are trending down, on a yearly basis sales are still more than 10 percent above where they were in September of 2012.
In addition, home prices are on the rise, NAR reported. The median existing-home price was $199,200 for the month, more than 11 percent higher than the same time last year.
The San Francisco Federal Reserve Bank recently noted that higher prices could drive up the currently sluggish home sales, according to Reuters. A study performed by the San Francisco Fed explained that homebuyers may be waiting for prices to change.
The reason is because higher home prices mean many current owners will have increased equity, and therefore be able to sell their properties and buy new ones. However, economic conditions and mortgage rates have slowed the housing recovery for the time being.
Well-informed real estate agents can sell throughout the year. Courthouse Retrieval System provides accurate mortgage records, property data and much more for all professionals who want an in-depth understanding of the housing market.