A major fallout from the housing crisis has improved to the lowest level since then.
Distressed sales – foreclosures and short sales – as a percent of residential sales fell to 4% in September.
That’s the lowest level since the National Association of Realtors’ record keeping began in October 2008.
After the economic crisis, many homeowners sold their homes for less than the amount owed on their mortgage to avoid entering foreclosure, or a bank takeover for non-payment.
Distressed and short sales made up about a third to half of all sales in 2012.
But as home prices rose and the economy improved, the number of distressed sales fell. Foreclosed homes made up 3% of sales in September, while short sales were just 1%.
- National Association of Realtors
In September, total existing home sales rose by 3.2% at a seasonally adjusted annual rate of 5.47 million in September, according to the NAR. Sales rose as first-time homebuyers faced less competition in the market from others who were looking to close deals before the start of the new school year.
Economists had forecast that sales increased by 0.4% in September at a seasonally adjusted annual rate of 5.35 million, according to Bloomberg.
The housing market continues to face an inventory crunch, which is lifting prices. Total housing inventory rose at the end of September, but was still down 7% from a year ago. It has fallen year-over-year for 16 straight months.
Homes were sold the quickest in San Jose, San Francisco, Seattle, and Denver.
“Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand,” said Lawrence Yun, the NAR’s chief economist, in the release.
Still, economists are optimistic on the housing market’s outlook.
“Current mortgage rates hovering near historic lows combined with increases in wages remain the key drivers of growth in thehousingmarket, as they continue to soften the impact of rising prices and offer consumers increased leverage and buoyedhome-buying power,” said Mark Fleming, chief economist at First American, in a preview.