First-time Buyers Boost Sales

Existing-home sales rebounded strongly in September and were propelled by sales from first-time buyers reaching a 34 percent share, which is a high not seen in over four years, according to the National Association of Realtors®. All major regions saw an increase in closings last month, and distressed sales fell to a new low of 4 percent of the market.
Total sales which are completed transactions that include single-family homes, town homes, condominiums and co-ops, hiked 3.2 percent to an annual rate of 5.47 million in September. After last month’s gain, sales are at their highest pace since June and are 0.6 percent above a year ago.
Lawrence Yun, NAR chief economist, says the two-month slump in existing sales reversed course convincingly in September. “The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual, he said. “Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time homeowners to buy last month.”
The median existing-home price in September was $234,200, up 5.6 percent from September of last year ($221,700). September’s price increase marks the 55thconsecutive month of year-over-year gains.
Matching the highest share since July 2012, first-time buyers were 34 percent of sales in September, which is up from 31 percent in August and 29 percent a year ago. First-time buyers represented 30 percent of sales in all of 2015.


While home sales trended lower nationally, the Pending Home Sales Index for the Northeast Region rose 1.3 percent in August and is now 5.9% above a year ago.
Lawrence Yun, Chief Economist for the National Association of Realtors said that a new NAR study revealed single family construction is not keeping pace with job creation and is lacking overall in 80% of measured metro areas.
Yun said, “Contract activity slackened through out the country in August except for in the Northeast,, where higher inventory totals are giving home shoppers greater options and better success signing a contract.
Following the August decline Yun expects existing home sales in 2016 to be around 5.36 million, a 2.1 percent increase from 2015 and the highest annual pace since 2006. The national median existing home price growth is forecast this year to rise by around 4 percent.
Penobscot County home sales year to date surged by 21% compared to last year with 3332 homes sold for a total value of $428 million which was a dollar increase of 32%.
Sean Becketti, chief economist, Freddie Mac said the 5-year Treasury-indexed adjustable-rate mortgage (ARM) averaged 2.80 percent this week with an average 0.4 point, down from last week when it averaged 2.81 percent. A year ago, the 5-year ARM averaged 2.88 percent.

Reasons to Buy a Home This Fall

The fall may be notorious for a slowdown in the housing market. But for home buyers that shouldn’t mean they should go into early hibernation. For home shoppers, the fall likely will be the best time to buy.
Lower home prices – October can offer the best month for home deals, according to research by RealtyTrac of more than 32 million home sales over the last 15 years. In October, home buyers paid 2.6 percent below the estimated market value at the time for their homes, the study shows. In other words, on a $300,000 home, they could save $7,800 by purchasing it in October.
Less competition – The home buyer rush from the spring and summer is over. Home shoppers this summer who were rushing to find a home before school started have already found one. Fall home buyers will have less competition. Many folks will drop out of the market until after the new year.
More leverage – Home sellers in the fall may be more pressed to sell. They are generally people who need to sell, which can make for better negotiations for the buyer. The longer a home lingers, the more negotiating power the buyer likely will have. Plus, some sellers may want to get settled in their new home before the holidays and have more incentive to make a deal sooner rather than later.
Year-end tax credits – Home buyers who close on a home by the end of the fiscal year may find a nice tax deduction awaiting them on April 15. They may be able to deduct closing costs, property tax, and mortgage interest to offset their taxable earnings.