Existing home sales increased last month but can supply keep up?

by Steve Randall22 Nov 2019

Existing home sales gained 1.9% month-over-month in October to a seasonally adjusted annual rate of 5.46 million.

Sales were up 4.6% year-over-year according to data from the National Association of Realtors, although some regions continue to do better than some others.

"Historically-low interest rates, continuing job expansion, higher weekly earnings and low mortgage rates are undoubtedly contributing to these higher numbers," said Lawrence Yun, NAR's chief economist. "We will likely continue to see sales climb as long as potential buyers are presented with an adequate supply of inventory."

The Midwest and the South posted growth while the Northeast and the West both reporting a drop in sales.

Single-family home sales sat at a seasonally-adjusted annual rate of 4.87 million in October, down from 4.77 million in September, but up 5.4% from a year ago. The median existing single-family home price was $273,600 in October 2019, up 6.2% from October 2018.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 590,000 units in October, about even with the previous month and 1.7% lower than a year ago. The median existing condo price was $248,500 in October, which is an increase of 5.6% from a year ago.

Nationally, first-time buyers accounted for 31% of buyers, the same as a year earlier but down 2 percentage points from September.

The median existing-home price was up 6.2% year-over-year to $270,900 with all region’s posting gains.

Supply challenge

Supply remains challenging with total inventory at the end of October of 1.77 million units, down around 2.7% month-over-month and down 4.3% year-over-year. There was 3.9 months of unsold supply, down from 4.3 months a year earlier.

"The issuance of more housing permits is a very positive sign and a good step toward more inventory," said Yun, citing the latest data for housing starts. "In order to better counter and even slow the increase in housing prices, home builders will have to bring additional homes on the market."

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