U.S. Existing Home Sales Surge 4.7% in September

WASHINGTON--Sales of existing homes rose 4.7%in September to its second-highest pace in eight years, as continued low interest rates and pent-up demand supported the housing recovery. Existing-home sales rose in September from August to a seasonally adjusted annual rate of 5.55 million, the National Association of Realtors said on Thursday. It was the fourth month of gains in the past five months. Economists surveyed by The Wall Street Journal had expected a rise in September of 1.7% to 5.4 million. September’s rise follows a sharp drop in August, which came on the heels of three straight months of gains. August’s sales were revised down to 5.3 million from an initial estimate of 5.31 million. The national median home price was $221,900 in September, up 6.1% from September 2014. The housing market has been relatively robust in many markets across the country. Prices have risen year-over-year for more than three years straight. Inventory of existing homes for sale stood at 4.8 months’ worth of supply, down from 5.1 months’ worth in August. “Come spring of next year, based on the current trend, we find we could be facing really tight inventory situation once the spring buying season returns, unless homebuilders really ramp up production,” said Lawrence Yun, chief economist for the NAR. U.S. home building rebounded in September after two straight months of declines, the Commerce Department said earlier this week, largely due to a sharp increase in construction of apartments and other multifamily housing. But homebuilders have reported labor shortages as many construction workers who lost jobs during the recession moved on to other industries or left the labor market altogether. Sales of newly built homes rose 5.7% in August, according to a separate report from the Commerce Department. September’s data on new home sales will be released on Monday. Whether the U.S. housing market can sustain its relatively robust activity in the face of global headwinds remains to be seen. The pace of job creation slowed in September, with employers adding just 142,000 jobs, and an average of 167,000 a month over the past three months. That three-month rate was the slowest pace since February 2014. Some factors remain supportive, such as a decision in September by the Federal Reserve not to raise short-term interest rates, which would have likely caused mortgage rates to rise. But wage gains have been muted over the recovery, despite steady job creation over the past six years. That makes it harder for potential buyers to save for a down payment on a home, especially in regions like the South and West, where home prices have risen fast over the past year. Write to Anna Louie Sussman at anna.sussman@wsj.com and Jeffrey Sparshott at jeffrey.sparshott@wsj.com This article originally appeared on The Wall Street Journal.