Morning Briefing: October sets new pace for existing home sales

by Steve Randall23 Nov 2016
October sets new pace for existing home sales
There was a jump in sales of existing homes in October, surpassing the record set in June to become the highest annualized pace in a decade.

Figures from the National Association of Realtors saw all four regions gain both monthly and annually with a 2 per cent national rise to a seasonally-adjusted annual rate of 5.6 million.

"October's strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply," said Lawrence Yun, NAR chief economist. "Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes." 

The median price of an existing home was up 6 per cent year-over-year in October to $232,200.
 
Millennials set to buy in 2017 but costs are rising
More millennials will become homeowners next year despite the rising cost of new homes and an easing of rental prices.

That’s according to an outlook from Zillow which also sees homeownership increasing across minorities due to the greater racial diversity of the millennial generation.

The real estate firm says that home prices will rise 3.6 per cent in 2017, a slower pace than the 4.8 per cent rise to date in 2016. Buyers will spend more as the cost of construction rises further.

“For those considering new construction in 2017, it's worth considering the added cost that may come amidst ongoing construction labor shortages that could get worse if President-elect Trump follows through on his hard-line stances on immigration and immigrant labor, warned Zillow chief economist Dr Svenja Guddell. “A shortage of construction workers as a result may force builders to pay higher wages, costs which are likely to get passed on to buyers in the form of higher new home prices.”

New development will likely by denser with smaller homes close to transit links, although more people will move to the suburbs which means a greater proportion of homeowners driving to work.
 
New York home sales second-highest October ever
Sales of homes in New York state rose to their second highest level ever for October with 11,201 closed sales, exceeded only by record sales a year earlier.

October home sales, while falling short of last year’s high-water mark, were exceptional as the statewide housing market remained very active into the fall,” said Duncan R. MacKenzie, CEO of the New York State Association of REALTORS. “With 10 months in the books, 2016 total sales remain nearly 10 percent above last year’s total. As we begin to look toward the end of the year, we anticipate completing our fourth consecutive year of home sales growth.” 

Inventory remains tight with 6.4 months of supply compared to 9.1 months a year earlier. That helped push the statewide median sales price to $235,000, up 2.2 per cent from a year earlier. 

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