Existing Home Sales Post 2% October Growth

Existing home sales rose by 2 percent in October, but dwindling inventories continued to hamper closings, the National Association of Realtors said yesterday.

NAR said total existing-home increased by 2.0 percent to a seasonally adjusted annual rate of 5.48 million in October from a downwardly revised 5.37 million in September. After last month’s increase, sales are at their strongest pace since June (5.51 million), but still remain 0.9 percent below a year ago.

Single-family home sales rose by 2.1 percent to a seasonally adjusted annual rate of 4.87 million in October from 4.77 million in September, but fell by 1.0 percent from year ago. The median existing single-family home price rose to $248,300 in October, up 5.4 percent a year ago. Existing condominium and co-op sales increased by 1.7 percent to 610,000 units in October and were unchanged from a year ago. The median existing condo price rose to $236,800 in October, 6.9 percent higher than a year ago.

All regions saw October increases. Sales in the South increased by 1.9 percent to an annual rate of 2.16 million in October, but fell by 1.8 percent from a year ago. The median price in the South rose to $214,900, up 4.6 percent from a year ago. Sales in the West rose by 2.4 percent to 1.27 million in October and by 0.8 percent from a year ago. The median price in the West rose to $375,100, up 7.8 percent from a year ago.

Sales in the Northeast rose by 4.2 percent to an annual rate of 740,000, (unchanged from a year ago). The median price in the Northeast rose to $272,800, 6.6 percent above a year ago. In the Midwest, sales inched up by 0.8 percent to 1.31 million in October, but fell by 1.5 percent from a year ago. The median price in the Midwest rose to $194,700, up 7.1 percent from a year ago.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. said sales improved for the second straight month as hurricane-related disruptions somewhat eased.

“Home sales slow during the fall and winter, so unusual swings due to weather events often exaggerate the month-to-month changes,” Vitner said. “Even with the gains the past two months, existing home sales remain 0.9 percent below their year ago level.”

Vitner noted while this summer’s storms undoubtedly took some steam out of the housing market, the greater problem remains the general lack of inventory. “People simply are not moving as much as they used to,” he said. “Many homeowners are reluctant to put their home on the market because they are afraid they will not find a more desirable home to purchase before their current home sells.”

However, NAR Chief Economist Lawrence Yun said job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home.

“The residual effects on sales from Hurricanes Harvey and Irma are still seen in parts of Texas and Florida,” Yun said. “However, sales should completely bounce back to their pre-storm levels by the end of the year, as demand for buying in these areas was very strong before the storms.”

NAR said the median existing-home price for all housing types in October rose to $247,000, up 5.5 percent from a year ago ($234,100), the 68th straight month of year-over-year gains. Total housing inventory at the end of October decreased by 3.2 percent to 1.80 million existing homes available for sale and is now 10.4 percent lower than a year ago (2.01 million) and has fallen year-over-year for 29 consecutive months. Unsold inventory is at a 3.9-month supply at the current sales pace, down from 4.4 months a year ago.

The report said properties typically stayed on the market for 34 days in October, which is unchanged from last month and down from 41 days a year ago. Forty-seven percent of homes sold in October were on the market for less than a month.

NAR said first-time buyers represented 32 percent of sales in October, up from 29 percent in September but down from 33 percent a year ago. All-cash sales represented 20 percent of transactions in October, unchanged from September and down from 22 percent a year ago. Individual investors purchased 13 percent of homes in October, down from 15 percent last month and unchanged from a year ago.

Distressed sales represented 4 percent of sales in October, unchanged from last month and down from 5 percent year ago. Three percent of October sales were foreclosures; 1 percent were short sales.