Existing Home Sales Up, But Fundamental Problems Persist
Existing home sales finally showed signs of life in September after three consecutive monthly declines, but the National Association of Realtors warned low inventories and weather issues could persist.
NAR reported total existing-home rose by 0.7 percent to a seasonally adjusted annual rate of 5.39 million in September from 5.35 million in August. But the September sales pace fell by 1.5 percent below a year ago and is the second slowest over the past year (behind August).
Single-family home sales rose by1.1 percent to 4.79 million in September from 4.74 million in August, but fell by 1.2 percent from a year ago. The median existing single-family home price rose to $246,800 in September, up 4.2 percent from a year ago.
Existing condominium and co-op sales decreased by 1.6 percent to 600,000 units in September and by 3.2 percent from a year ago. The median existing condo price rose to $231,300 in September, 4.1 percent above a year ago.
Regionally, results were mixed. Sales in the South fell by 0.9 percent to 2.13 million in September and by 2.3 percent from a year ago. The median price in the South rose to $215,100, up 4.6 percent from a year ago. In the West, sales increased by 3.3 percent to 1.24 million and were unchanged from a year ago. The median price in the West rose to $362,700, up 5.0 percent from a year ago.
Sales in the Northeast were unchanged from August at 720,000 and fell by 1.4 percent from a year ago. The median price in the Northeast rose to $274,100, 4.8 percent higher than a year ago. In the Midwest, sales rose by 1.6 percent to 1.30 million in September, but fell by 1.5 percent from a year ago. The median price in the Midwest rose to $195,800, up 5.4 percent from a year ago.
Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said despite the September gain the “cumulative effect” of prior months’ declines led to sales falling on a year over year basis. “Hurricane Harvey and Hurricane Irma likely weighed on September’s sales,” he said. “Existing home sales fell 0.9 percent in the South, which was the only region seeing a decline.”
“Home sales in recent months remain at their lowest level of the year and are unable to break through, despite considerable buyer interest in most parts of the country,” said NAR Chief Economist Lawrence Yun. He noted primary impediments stifling sales growth “are the same as they have been all year: not enough listings–especially at the lower end of the market–and fast-rising prices that are straining the budgets of prospective buyers.”
NAR said the median existing-home price for all housing types in September rose to $245,100, up 4.2 percent from a year ago ($235,200). September’s price increase marks the 67th straight month of year-over-year gains.
Total housing inventory at the end of September rose by 1.6 percent to 1.90 million existing homes available for sale, but remains 6.4 percent lower than a year ago (2.03 million) and has fallen year-over-year for 28 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, down from 4.5 months a year ago.
“The sharper drop in inventories really drives home the point that home sales are being held back primarily due to the lack of homes for sale,” Vitner said.
NAR said first-time buyers represented 29 percent of sales in September, down from 31 percent in August and 34 percent a year ago and matches the lowest share since September 2015. All-cash sales represented 20 percent of transactions in September, unchanged from August and down from 21 percent a year ago. Individual investors purchased 15 percent of homes in September (unchanged from last month and a year ago).
The report said distressed sales represented 4 percent of sales in September, unchanged from last month and a year ago. Three percent of September sales were foreclosures and 1 percent were short sales.
