- The Washington Times - Friday, October 16, 2009

Sales of existing homes in the Washington region were higher in September than in August, something we don’t see very often.

The increase was very small but is noteworthy because it is unusual. Notice on the fever chart how sales typically drop in September. That’s normal because September has enough activity of its own with the start of school, a new session of Congress, etc. It’s just not a hot month for home sales.

Sales this September were a little higher than in August and a lot higher than in September 2008. Sales were up 21 percent compared to last year. Total sales for the first nine months of the year were 22 percent higher than last year.

Click here to view charts of local September resales.

Why was this September atypical? Three things made it a good month for buyers:

Home prices have fallen in recent years, making a home purchase more affordable than it was a short time ago.

Mortgage interest rates also have fallen. According to Bankrate.com, the average 30-year fixed-rate loan was more than 6 percent a year ago. Rates fell to less than 6 percent early this year and in recent weeks have fallen below 5 percent. That makes home-buying even more affordable.

First-time buyers are taking advantage of the federal tax credit that has been available since January.

That tax credit, up to $8,000, will not apply to purchases made after Dec. 1, however, so the current surge of buyer interest may expire with it.

We can expect December sales to be rather low, not just because of the tax credit going away but mostly because December is always the slowest sales month of the year.

Still, if interest rates climb back up to more than 5 (or even 6) percent, that could further diminish buyer activity in the coming months.

Contact Chris Sicks by e-mail (csicks@gmail.com).

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