Existing Home Sales Dip From 18-Month High

-edited

Existing home sales fell 2.2% in Sep to 5.38 million units SAAR. Sales are barely in the Econoday consensus range.

Econoday expected 5.44 million sales in a range of 5.37 million to 5.55 million units.

The National Association of Realtors reports Existing-Home Sales Decrease 2.2% in September to 5.38 million units at a Seasonally Adjusted Annualized Rate (SAAR).

Total existing-home sales completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 2.2% from August to a seasonally adjusted annual rate of 5.38 million in September. Despite the decline, overall sales are up 3.9% from a year ago (5.18 million in September 2018).

Lawrence Yun, NAR’s chief economist, said that despite historically low mortgage rates, sales have not commensurately increased, in part due to a low level of new housing options. “We must continue to beat the drum for more inventory,” said Yun, who has called for additional home construction for over a year. “Home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential.”

The median existing-home price for all housing types in September was $272,100, up 5.9% from September 2018 ($256,900), as prices rose in all regions. September’s price increase marks 91 straight months of year-over-year gains.

Total housing inventory at the end of September sat at 1.83 million, approximately equal to the amount of existing-homes available for sale in August, but a 2.7% decrease from 1.88 million one year ago. Unsold inventory is at a 4.1-month supply at the current sales pace, up from 4.0 months in August and down from the 4.4-month figure recorded in September 2018.

By Region

  • Existing-home sales in the Northeast fell 2.8% to an annual rate of 690,000, a 1.5% rise from a year ago. The median price in the Northeast was $301,100, up 5.2% from September 2018.
  • Existing-home sales in the Midwest dropped 3.1% to an annual rate of 1.27 million, which is nearly equal to August 2018. The median price in the Midwest was $213,500, a 7.2% jump from a year ago.
  • Existing-home sales in the South decreased 2.1% to an annual rate of 2.28 million in September, up 6.0% from a year ago. The median price in the South was $237,300, up 6.3% from one year ago.
  • Existing-home sales in the West declined 0.9% to an annual rate of 1.14 million in September, 5.6% above a year ago. The median price in the West was $403,600, up 4.5% from September 2018.

Existing Home Sales 1970-Present

Key Points

  • Existing home sales are at a level first reached in 1999.
  • Sales peaked this cycle in late 2017 before going on a steep dive as the Fed hiked rates.
  • Sales are up year-over-year primarily because comparisons are easy.

Mike "Mish" Shedlock

Comments (10)
No. 1-8
Mish
Mish

Editor

My understanding is the problem with editing comments is now fixed. Would those experiencing problems give it a try.

Mish
Mish

Editor

Prime Minister will give speech in a few minutes

anoop
anoop

Calculated Risk thinks this was a solid report.

Herkie
Herkie

I am planning to buy in the spring, region north of Tampa Bay, but may not move at all now because prices are now getting out of reach there as well. Part of the problem is that just because mortgage interest rates have fallen they have not fallen enough. Historically over the last several decades mortgage interest tracks the 10 year note (as I type 1.79%) plus about 1-1.5% (depending on lender and such things as points/fees) and right now that would indicate a mortgage rate of about 2.79~3.29% give or take, yet rates are still averaging 4.08% last week and "The current average 30-year fixed mortgage rate in Florida decreased 4 basis points from 3.71% to 3.67%. Florida mortgage rates today are 7 basis points lower than the national average rate of 3.74%." That is a quote minutes old from Zillow.

Nearly a full 100 basis points higher than the long term average.

I am planning to use my VA home loan benefit, but, can't buy till second half of April into May. If prices keep going the way they have been I will be locked out by then for what I am willing to accept at these prices. And, at my age I am thinking it is now or never, so being locked out in the next six months means being a renter for however long I have left to live. (early 60's)

[EXPERIMENTAL EDIT for Mish's information] Function is now working for me Mish!

Matt3
Matt3

A dip from an 18 month high? This is awful. A recession is coming. I also forecast rain. Maybe not tomorrow but it will come! I'm very good at forecasting.

Tony Bennett
Tony Bennett

"Existing home sales fell 2.2% in Sep to 5.38 million units SAAR. Sales are barely in the Econoday consensus range."

....

I would have expected better. Interest rates tanked in August, then bounced in September. BUT (potential) buyers on fence in August probably pounced and locked in rate ... and closed in September (existing home sale counted when closed).

Look for "unexpectedly" poor October sales.

Runner Dan
Runner Dan

"Part of the problem is that just because mortgage interest rates have fallen they have not fallen enough."

Herkie, I believe you might want to root for higher mortgage rates because higher rates means your competition can't borrow as much money and this puts downward pressure on house prices.

Either way, good luck with your purchase. My gut feeling says prices will decline going forward, so next spring will be a better buying environment. However, I am terrible at predicting such things!

LB412
LB412

Sales were up 3.6% YOY