Existing home sales in the United States reached its highest in September 2014 showing the imminent strength in the housing market, according to the National Association of Realtors.
"The signs of life in the housing market are generally positive and the resale market appears to be strengthening again," John Ryding, economist at RDQ economics, said in a note to clients, according to The Wall Street Journal.
Total existing home sales in the country spiked 2.4 percent to a seasonally adjusted 5.17 million units in September.
Sales of single family homes improved 2 percent in September and the median price was $210,300. Condo and co-op sales also rose 5.2 percent and the median price was $205,200.
NAR experts said that the considerable rebound in sales was due to strengthening demand on low mortgage rates and relatively lower prices.
"Low interest rates and price gains holding steady led to September's healthy increase, even with investor activity remaining on par with last month's marked decline," Lawrence Yun, chief economist of NAR, said in a statement. Yun added that the global economic turmoil will probably keep mortgage rates hovering at their current lows.
All-cash sales made up for 24 percent of all the transactions - 33 percent below the year-over-year figure but up one percent from the percentage recorded in August. Last month, existing home sales declined slightly as the market saw a huge outflow of all-cash buyers. At that time, experts said that it would only boost lending and make way for more new-home buyers who could take out a mortgage on their dream home.
However, Yun warns about the falling inventory, which is a seasonal trend. Total housing stock was down 1.3 percent in September, but unsold inventory was still high at 6 percent.
"Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline in choices due to the fact that inventory generally falls heading into the winter," Yun explained.
Despite the decline in all-cash home sales last month, new home buyers still remained under the radar in September at 29 percent, unchanged for the third consecutive month. Industry experts say that a full-fledged growth can take off only if more new home buyers got involved in the housing market.
"We need to see more first-time buyers both willing and able to buy, without the support of excessively easy credit, if we really want to see a healthier and more sustained recovery in housing," Diane Swonk, chief economist at Mesirow Financial, told Reuters.
On the whole, economists are positive about the housing market and its performance in the coming years.
"I would say one year from now, two years from now, things will be much better because we have so many factors that will support home sales," Yun told The Journal.
