Thursday, November 20, 2014

First Year-Over-Year Rise in Existing Home Sales in a Year

Existing home sales rose 1.5% in October to a seasonally adjusted annual rate of 5.26 million. Sales are now above the year-over-year levels for the first time in a year, and have reached the highest annual pace since September 2013. Sales in September was upwardly revised to a seasonally adjusted annual rate 5.18 million.

The median existing-home price increased 5.5% year-over-year to $208,300 in October, marking the 32nd consecutive month of year-over-year price gains.

Total housing inventory fell 2.6% in October to 2.22 million homes available for sale, yet increased 5.2% from October 2013. There is currently a 5.1-month supply of total existing homes available for sale, the lowest since March.

NAR Chief Economist Lawrence Yun noted: “The growth in housing supply this year will likely prevent the drastic sales slowdown and coinciding spike in home prices we saw last winter due to low inventory. However, more housing starts are needed to increase supply, meet current demand and keep price growth in check.”

All-cash sales were 27% of transactions in October, a three-percentage point climb from September but four percentage points lower than October 2013.

First-time home buyers represent less than 30% of all buyers, the lowest level in nearly three decades. Earlier this month, Federal Housing Finance Agency Director Mel Watt offered details about several guidelines his agency intends to issue for loans with 3-5% down payments to be purchased by housing GSEs Fannie Mae and Freddie Mac. Speaking to a housing industry conference in New Orleans, Watt explained that the agency’s goal is to help address some of the headwinds to first-time homeownership. “We know that the size of a down payment — by itself — is not the most reliable indicator of whether a borrower will repay a loan,” he explained.

Regionally, existing home sales climbed 2.9% month-over-month in the Northeast, 5.1% in the Midwest and 2.8% in the South. However, sales in the West declined 5.0%.

Read the NAR report.

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