WASHINGTON D.C.: Sales of previously occupied homes in the U.S. recovered in September to their highest level since January, with mortgage rate increases encouraging buyers.
Existing homes sales rose 7 percent from August to a seasonally-adjusted annual rate of 6.29 million units, according to the National Association of Realtors (NAR).
According to FactSet, this figure is higher than the 6.11 million units expected by economists. However, sales were down 2.3 percent compared with September 2020.
"The increase in sales in the latest month, I would attribute to mortgage rates. This autumn season looks to be one of the best autumn home sales seasons in 15 years," said Lawrence Yun, NAR's chief economist, as quoted by ABC News.
A dip in mortgage rates in August resulted in buyers quickly closing deals on homes, which led to September's rise in completed transactions, he added.
While the average rate for a 30-year mortgage remains relatively low, it has increased steadily since August, when the weekly mortgage rate averaged 2.77 percent, stated mortgage buyer Freddie Mac.
Economists expect mortgage rates to rise to 4 percent next year, as the Federal Reserve implements policies to combat rising inflation.
There are also indications the housing market boom that saw 20 to 25 percent annual increases in median home prices is slowing.
The NAR noted at the end of September, that 1.27 million homes for sale remained unsold, down 0.8 percent from the previous month, and down 13 percent from last year.
Homes are continuing to be bought within days of being placed for sale, compared to last month when they typically remained on the market 17 for days before being bought.
The inventory of homes for sale should begin to improve next year, Yun said, stressing, "The decline is lessening and soon, in 2022, we will begin to see inventories are higher year-over-year," according to ABC News.