Photo: © gerenme - iStockphoto
According to the National Association of Realtors (NAR), existing-home sales climbed slightly higher in October. Lawrence Yun, chief economist for NAR, saw this as an encouraging sign: "Historically low interest rates, continuing job expansion, higher weekly earnings, and low mortgage rates are undoubtedly contributing to these higher numbers." He adds that as long as there is enough of a housing supply to satisfy the demand from potential buyers, sales should continue to grow in the coming months.
Home Inventory Continues to Fall
Unfortunately, the housing shortage is showing no signs of abating. By the end of October, there were 1.77 million homes available for sale, down 2.7 percent from a month earlier and 4.3 percent from a year earlier. At the current sales pace, inventory levels would last only 3.9 months. This was down from the 4.1-month supply in September 2019 and the 4.3-month supply in October 2018. The average home was available for sale for just 36 days in October; in comparison, homes were on the market for 32 days in September 2019 and 36 days in October 2018. Of all the homes sold in October, 46% remained on the market for less than a month. According to Yun, the issuance of more housing permits should help ease the inventory shortage across the country. However, "In order to better counter and even slow the increase in housing prices, home builders will have to bring additional homes on the market."
Climbing Home Prices
The housing market would benefit from a slowdown in home price increases. The median existing-home price rose 6.2% from October 2018. All regions of the country recorded increases in prices. What's more, this was the 92nd consecutive month of year-over-year price gains.
Regional Breakdown
When compared to a month ago, the Midwest and the South both experienced sales increases; however, every region saw their sales improve year over year. In terms of home prices, all housing regions in the country reported gains, with price increases the strongest in the West.
Northeast - Existing-home sales annual rate of 690,000; a decrease of 1.4% from September 2019, but unchanged from October 2018. Median home prices increased 5.7% from October 2018.
Midwest - Existing-home sales annual rate of 1.29 million; an increase of 1.6% from September 2019, and an increase of 2.4% from October 2018. Median home prices increased 6.7% from October 2018.
South - Existing-home sales annual rate of 2.35 million; an increase of 4.4% from September 2019, and an increase of 7.8% from October 2018. Median home prices increased 6% from October 2018.
West - Existing-home sales annual rate of 1.13 million; a decrease of 0.9% from September 2019, and an increase of 3.7% from October 2018. Median home prices increased 7.8% from October 2018.
