Economy
Low Inventory Driving Existing Home Prices Higher
Written by Sandy Williams
November 20, 2013
Existing home sales fell in October but low inventory continues to drive home prices upward said the National Association of Realtors in their November report. Existing housing inventory stood at 2.13 million homes at the end of October—a drop of 1.8 percent from last month.
Home sales fell 3.2 percent to a seasonally adjusted annual rate of 5.12 million in October from 5.29 million in September. Sales are up 6.0 percent from this time last year.
Single-family home sales dropped 4.1 percent while existing condominium and co-op sales rose 3.3 percent as compared to September.
The national median existing home price was up 12.8 percent year-over-year to $199,500. The median time on market rose to 54 days as compared to 50 days in September and 71 days in October 2012.
Fourteen percent of sales were from foreclosures and short sales, unchanged from September but well below the 25 percent level reported in October 2012.
Sales dropped in all the US regions while prices increased year-over year—ranging between a rise of 7.4 percent in the Northeast to 17.2 percent in the West.
Lawrence Yun, NAR chief economist, said a flattening trend is expected. “The erosion in buying power is dampening home sales,” he said. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”
The National Association of Realtors bases existing home sales on transaction closings, differing from U.S. Census Bureau new home sales which are based on contracts or acceptance of a deposit.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
ISM: Manufacturing growth slows in July, hits 10-month low
US manufacturing activity slowed again in July to a 10-month low
CRU: Pushing EU imports back to 15% would be a big task
Several EU member states have published a ‘non-paper’ that puts forward proposals for a post-safeguard trade measure.
SMU Community Chat: Tariff-induced panic purchases, inflation, and calculating costs
Chief executive of the Institute for Supply Management (ISM), Tom Derry highlighted how reactive buying behavior has shifted the market into a quiet demand period. Derry presented ISM data during the weekly SMU community chat.
Architecture billings still sluggish despite project inquiry uptick
The Architecture Billings Index (ABI), a leading indicator for non-residential construction activity, declined for an eighth straight month in June.
Beige Book: Tariff pressures mount, flat outlook
All districts reported “experiencing modest to pronounced input cost pressures related to tariffs, especially for raw materials used in manufacturing and construction.”