Steel Markets

Existing Home Sales at Highest Rate in a Decade

Written by Sandy Williams

November 22, 2016

Existing home sales grew for the second straight month, gaining 2 percent to a seasonally adjusted annual rate of 5.6 million in October from September’s upwardly revised 5.49 million. The National Association of Realtors reported that on a year over year basis, sales were up 5.9 percent and were at the highest level since February 2007 (5.79 million).

“October’s strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply,” said Lawrence Yun, NAR chief economist. “Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes.”

Added Yun, “The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.”

Median price, inclusive of all existing home types, jumped 6 percent year over year to $232,200. Higher mortgage rates of around 4 percent may encourage some buyers to lock in rates and buy now, while others may find the bigger monthly payment, especially for higher-end homes, a reason to delay purchasing, said Yun.

Single family sales were up 2.3 percent to a SAAR of 4.99 million, 6.6 percent higher than the Oct. 2015 level. Median price for an existing single family home was up 5.9 percent year over year to $233,700.

Existing condo and co-op sales were unchanged from September and a year ago at a SAAR of 610,000 units. The median price was $220,300, up 6.2 percent from a year ago.

Existing home inventory at the end of October declined 0.5 percent to 2.02 million homes, down 4.3 percent from a year ago. At the current sales pace, inventory is at a 4.3 month supply, down from 4.4 months in September.

The regional breakdown of SAAR and median price is as follows:

  • Northeast: 750,000, up 1.4 percent sequentially and y/y; median price $255,500
  • Midwest: 1.36 million, up 2.3 percent sequentially and 6.3 percent y/y; median price $181,500
  • South: 2.22 million, up 2.8 percent sequentially and 4.7 percent y/y; median price $202,300
  • West: 1.27 million, up 0.8 percent sequentially and 10.4 percent y/y; median price $345,800

Sandy Williams

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