Existing Home Sales Bounced Sharply Higher in September

Existing home sales jumped 9.4 percent in September to an annual pace of 5.57M units, the best performance since summer 2007. Buyers and sellers continued to take advantage of the first-time home buyer tax credit.

Sales Moved Sharply Higher

Sales jumped 9.4 percent, the biggest jump since the combined single- and multi-family series began in 1999. Single- and multi-family properties both saw increases of more than 9 percent. The longer-running single-family series saw its biggest monthly increase since 1983.

Inventory levels have improved, but are still a long way from “normal,” and equilibrium may be years away.

First-Time Homebuyer Tax Credit Still the Key

Buyers are likely rushing to complete transactions ahead of the looming tax credit expiration. We would expect higher sales levels to persist through October and into November before collapsing in December if the credit is not extended.

Average and median sales prices remain under pressure as buyers with access to the tax credit tend to purchase lower-end homes, which are dominating the marketplace at this point.

Wachovia Corporation
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