Sales of existing U.S. homes surged unexpectedly in September on low mortgage rates, a trade association group said Monday, adding that activity would have been even brisker had hurricanes not hit the south.
Sales of previously owned homes rose to a seasonally adjusted annual rate of 6.75 million units last month from an upwardly revised 6.55 million unit pace in August, the National Association of Realtors said.
Analysts had been expecting a drop to a 6.51 million unit rate.
The realtors group said September's pace was the third-highest on record and would have been even stronger had hurricanes not ripped through the U.S. southeast during the month.
"We've had a dramatic fall in 30-year fixed mortgage rates over the last several months and that's created a very favorable backdrop for housing," said David Lereah, chief economist for the NAR.
The national average interest rate for the popular 30-year home loan fell for the second straight week to 5.69 percent last week, mortgage finance company Freddie Mac said on Thursday.
The national median home price was up 8.6 percent from the same month a year earlier to $186,600, the NAR report showed.
Inventories remained tight. The supply of homes available for sale at the current pace fell to 4.4 months worth from 4.5 months in August.
Economist Ken Mayland said the number boded well for retail sales in the holiday season.
"With the holiday selling season around the corner, it's worth mentioning that strong sales of new or existing homes lead to downstream purchases for furniture, carpeting and appliances," Mayland, president of Clearview Economics LLC in Pepper Pike, Ohio, said.