September Existing Home Sales, Inventory Post First Gains in 4 Months

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The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in September rose by 0.7% to a seasonally adjusted annual rate of 5.39 million from a total of 5.35 million in August. This is the first increase in four months.

The consensus estimate called for sales to reach 5.3 million, according to a survey of economists polled by Bloomberg. Total sales in 2016 came in at 5.45 million to surpass 2015’s total of 5.25 million as the most sales since 2006, when 6.48 million homes were sold.

The NAR’s chief economist, Lawrence Yun, said:

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. Realtors® this fall continue to say the 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.

Sales activity likely would have been somewhat stronger if not for the fact that parts of Texas and South Florida – hit by Hurricanes Harvey and Irma – saw temporary, but notable declines.

Housing inventory increased by 1.6% in September to 1.9 million homes, equal to a supply of 4.2 months, flat with August, and has fallen year over year for 28 consecutive months. Inventory is down 6.4% year over year from 2.03 million in September 2016.

According to the NAR, the national median existing home price for all housing types in August was $245,100, up 4.2% compared with September 2016, the 67th consecutive month of rising home prices. In August the national median price was $253,500.

The percentage of first-time buyers fell from 31% in August to 29%, and down from 34% in September 2016. For all of 2016, first-time buyers accounted for 35% of sales.

Sales of single-family homes rose 1.1% from the August total of 4.74 million to a seasonally adjusted annual rate of 4.79 million, and they are down 1.2% compared with September 2016. Sales of multifamily homes decreased by 1.6% in September to a seasonally adjusted annual rate of 600,000 units.

All homes were on the market for an average of 34 days in September, up from 30 days in August and down from 39 days in September 2016. Foreclosure (3%) and short (1%) sales accounted for 4% of all September sales, flat with both August and September 2016.

The NAR also reported the following regional data.

September existing-home sales in the Northeast remained flat at an annual rate of 720,000 compared with August and are 1.4% lower than September 2016 sales. The median price in the Northeast was $274,100, up 4.8% compared with September of last year.

In the Midwest, existing-home sales rose 1.6% to an annual rate of 1.3 million in September and were 1.5% lower than September 2016 sales. The median price in the Midwest was $195,800, up 5.4% from a year ago.

Existing-home sales in the South slipped 0.9% in September to an annual rate of 2.13 million, and they are now 2.3% lower than September 2016 sales. The median price in the South was $215,100, up 4.6% from a year ago.

Existing-home sales in the West rose 3.3% to an annual rate of 1.24 million in September, unchanged compared with September 2016 totals. The median price in the West was $362,700, up 5% compared with the September 2016 median.