NWS News Corporation

WASHINGTON--Home-buying activity picked up in September following a two-month slide, a rebound that pointed to stabilization in the U.S. housing market.

Sales of previously owned homes rose 3.2% from August to a seasonally adjusted annual rate of 5.47 million, the National Association of Realtors said Thursday. Economists surveyed by The Wall Street Journal had expected a more modest 0.4% increase to a sales rate of 5.35 million in September.

Existing-home sales account for the vast majority of U.S. home-buying activity. After peaking in June at an annual rate of 5.57 million, the strongest monthly sales pace since February 2007, sales softened in July and August. The August sales pace on Thursday was revised down to 5.30 million from an earlier estimate of 5.33 million.

September's sales rebound showed the summer slowdown was a "moderate decline and not a turning point," said Lawrence Yun, the NAR's chief economist.

Sales of previously owned homes in September were up 0.6% from a year earlier.

Inventory remained tight and prices continued to rise. At the latest sales pace, it would take 4.5 months to exhaust the supply of previously owned homes on the market, down from 4.8 months in September 2015. The median price of an existing home sold in September was $234,200, up 5.6% on the year.

First-time home buyers accounted for 34% of September sales, according to NAR, up from 31% in August and matching the highest level since July 2012. At the same time, foreclosures and short sales are in retreat--just 4% of September purchases were so-called distressed sales, edging down from 5% the prior month.

News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.

The U.S. housing market's prolonged recovery following the 2007-09 recession was a solid contributor to overall economic growth in recent years. But a pullback in residential investment during the second quarter, following eight consecutive quarters of growth, acted as a drag on the broader economy.

Federal Reserve officials last month judged that "the sluggishness in the housing sector appeared to have continued into the third quarter," according to minutes of the Fed's Sept. 20-21 policy meeting that were released last week.

Recent data have suggested weakness in construction of apartment buildings and other multifamily structures, balanced by rising investment in single-family housing. Permits issued for buildings with five or more residential units were down 11.6% in the first nine months of 2016 versus a year earlier, while permits for new single-family homes were up 8.1% over the same period, the Commerce Department said Wednesday.

Sales of newly built single-family homes, which account for a small slice of the overall market, rose 13.3% in the first eight months of the year compared with the same period in 2015, according to the agency.

Borrowing costs remain low for prospective home buyers who qualify for loans. The average interest rate on a 30-year fixed-rate mortgage in September was 3.46%, up slightly from 3.44% the prior two months but well below the September 2015 average of 3.89%, according to Freddie Mac.

Write to Ben Leubsdorf at ben.leubsdorf@wsj.com and Jeffrey Sparshott at jeffrey.sparshott@wsj.com

(END) Dow Jones Newswires

October 20, 2016 10:35 ET (14:35 GMT)

News (ASX:NWS)
Historical Stock Chart
From Mar 2024 to Apr 2024

News (ASX:NWS)
Historical Stock Chart
From Apr 2023 to Apr 2024