by Moureen Allard
According to Ruth Mantell of MarketWatch, Sales of used Southern California homes in September hit the fastest pace in a year, a welcome sign after posting an unexpected drop in the prior month, according to data released Tuesday.
“Low-interest rates and price gains holding steady led to September’s healthy increase,” said Lawrence Yun, NAR’s chief economist.
The recent tumble in mortgage rates is making loans cheaper for prospective borrowers. However, credit standards remain strict, preventing many families from taking advantage of the current low rates.
Mortgage access is only one key ingredient for the Orange County housing market’s continued recovery. Strong and consistent jobs growth is also needed. Otherwise, the pace of the household formation will remain slow, with families and friends doubling up in homes to save money.
Sales of existing homes rose 2.4% in September to a seasonally adjusted annual rate of 5.17 million.
Economists polled by MarketWatch had expected the sales rate to increase to 5.1 million in September from 5.05 million in August.
“It appears that existing home sales have resumed their climb after the impact on sales of the rise in yields during the taper tantrum,” RDQ Economics analysts wrote in a research note. “The signs of life in the housing market are generally positive and the resale market appears to be strengthening again.”
However, September’s pace of sales was down 1.7% from a year earlier, signaling shakiness in the market after a rough winter and weaker results earlier this year.
For more sales of existing homes, mortgage access is of top importance. Federal regulators are working to loosen the credit environment. But current standards are still strict, with the country’s top mortgage lenders recently reporting slow growth for home loans.
If credit conditions ease back to “normal” pre-bubble standards, that could bump up home sales by about 10%, NAR’s Yun said Tuesday.
Elsewhere in the housing market, the government reported last week that the pace of home construction climbed last month, led by apartment building. Economists prefer to see more building of single-family homes, which cost more to put up than constructing one apartment. The market for new homes, which typically cost more than existing homes, attracts a wealthier clientele.
Moureen Allard – Realtor®
Top Orange County Real Estate Agent