Home Sales Are Rising Despite Supply Woes
November 21, 2017
Existing-home sales in October rose to the strongest pace since earlier this summer, the National Association of REALTORS® reported Tuesday.
Total existing-home sales—which comprise completed transactions of single-family homes, townhomes, condos, and co-ops—rose 2 percent month over month to a seasonally adjusted annual rate of 5.48 million. Sales are now at the strongest pace since June’s 5.51 million.
However, sales remain 0.9 percent below a year ago, NAR reports. Continual supply shortages have led to fewer closings on an annual basis for the second consecutive month.
“Job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home,” says Lawrence Yun, NAR’s chief economist. “While the housing market gained a little more momentum last month, sales are still below year-ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated.”
Lower sales are still evident in parts of Texas and Florida from Hurricanes Harvey and Irma, Yun notes. He predicts that sales will rebound to their pre-storm levels by the end of the year “as demand for buying in these areas was very strong before the storms.”
Here’s a closer look at existing-home sales in October, according to NAR’s report:
- Home prices: The median existing-home price for all housing types in October was $247,000, up 5.5 percent from a year ago.
- Inventory: Total housing inventory at the end of October dropped 3.2 percent to 1.80 million existing homes available for sale. Inventory is now 10.4 percent lower than a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace, down from 4.4 months a year ago.
- All-cash sales: All-cash transactions comprised 20 percent of sales in October, down from 22 percent a year ago. Individual investors make up the biggest bulk of cash sales. They accounted for 13 percent of sales in October, unchanged from a year ago.
- Distressed sales: Foreclosures and short sales accounted for 4 percent of sales in October, down from 5 percent a year ago. Broken out, foreclosures comprised 3 percent of sales and short sales made up 1 percent.
- Days on the market: Forty-seven percent of homes sold in October were on the market for less than a month. Properties, on average, stayed on the market for 34 days in October, down from 41 days a year ago.
“Listings—especially those in the affordable price range—continue to go under contract typically a week faster than a year ago, and even quicker in many areas where healthy job markets are driving sustained demand for buying,” Yun says. “With the seasonal decline in inventory beginning to occur in most markets, prospective buyers will likely continue to see competitive conditions through the winter.”
Updated: June 20, 2018