Existing Home Sales Break Free From Losing Streak, Posting October Gains

Existing home sales broke their
extended losing streak
in October, increasing 1.4 percent from September to a
seasonally adjusted annual rate of 5.22 million completed sales.  It was the first positive report on sales of
existing single-family homes, condos, townhouses, and co-op apartments since
last March. The National Association of Realtors® (NAR) said the gain was not enough
however to return existing home sales activity to 2017 levels.  They lag the 5.5 million transactions last October
by 5.1 percent

After overshooting the mark with
their last six forecasts, analysts polled by Econoday were more restrained and consequently quite accurate in
their expectations for October. Their predictions were in the range of 5.10 to
5.35 million units with a consensus of 5.20 million.

Single-family home sales were at a
seasonally adjusted annual rate of 4.62 million in October compared to 4.58
million in September and are 5.3 percent below the 4.88 million rate a year
earlier.  Existing condo and co-op sales
rose 5.3 percent to an adjusted annual rate of 600,000 units but they remain
down 3.2 percent on a year-over-year basis.

Lawrence Yun, NAR’s chief economist,
says increasing housing inventory has brought more buyers to the market. “After
six consecutive months of decline, buyers are finally stepping back into the
housing market,” he said. “Gains in the Northeast, South and West – a reversal
from last month’s steep decline or plateau in all regions – helped overall
sales activity rise for the first time since March 2018.”

The median existing-home price for
all housing types in October was $255,400, up 3.8 percent from last October’s
median of $246,000. October’s price increase marks the 80th straight month of
year-over-year gains.  The median
single-family price was $257,900 representing 4.3 percent annual appreciation.  Condo prices eased by 0.2 percent to a median
of $236,200.

Overall housing inventory declined from
1.88 million available homes in September to 1.85 million, but that is a
half-million more listings than in October 2017.  Unsold inventory is at a 4.3-month supply at
the current sales pace, down from 4.4 last month and up from 3.9 months a year

Properties typically stayed on the
market for 33 days in October, up from 32 days in September but down from 34
days a year ago. Forty-six percent of homes sold in October were on the market
for less than a month.

“As more inventory enters the market
and we head into the winter season, home price growth has begun to slow more
meaningfully,” said Yun. “This allows for much more manageable, less frenzied
buying conditions.”

“Rising interest rates and
increasing home prices continue to suppress the rate of first-time homebuyers.
Home sales could further decline before stabilizing. The Federal Reserve
should, therefore, re-evaluate its monetary policy of tightening credit,
especially in light of softening inflationary pressures, to help ease the
financial burden on potential first-time buyers and assure a slump in the
market causes no lasting damage to the economy,” says Yun.

First-time buyers were responsible
for 31 percent of sales in October, down 32 percent both in September and the
previous October.  Individual investors
purchased 15 percent of homes, up by 2 points from both earlier periods.  Cash sales made up 23 percent of all
transactions, also slightly higher than in September and October 2017.

Distressed sales, foreclosures and
short sales, accounted for 3 percent of sales, unchanged from last month and 1
percentage point lower than a year earlier. 
This is the lowest level for these sales since NAR began tracking them
in October 2008.

Sales were up in three of the four
regions.  In the Northeast existing home
sales gained 1.5 percent to an annual rate of 690,000, 6.8 percent below a year
ago. The median price in the Northeast was $280,900, which is 3.0 percent higher
than last October.

In the Midwest, existing-home sales
declined 0.8 percent from last month and 3.1 percent on an annual basis to 1.27
million in October.  The median price in
the Midwest was $197,000, a 2.4 percent annual gain.

Existing-home sales in the South
rose 1.9 percent to an annual of 2.15 million units, a 2.3 percent
annual decline.  The
region’s median price increased 3.8 percent to $221,60.

Sales in the West grew 2.8 percent
to an annual rate of 1.11 million but were down 11.2 percent from the previous
October. Prices increased a median of 1.9 percent to $382,900.

Article source: http://www.mortgagenewsdaily.com/11212018_existing_home_sales.asp

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