NAR: Existing Home Sales Continue to Set Records, Though Election and Covid-19 Put Future Surge in Doubt
Washington, D.C. (PPD) — The National Association of Realtors (NAR) reported existing home sales soared again in October, easily beating the forecast and gaining for the fifth straight month. While all four major regions posted month-over-month and year-over-year gains, the Midwest saw the highest climb in both.
Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums and co-ops — increased 4.3% to a seasonally-adjusted annual rate of 6.85 million. That surpasses September and the surge in August, when sales hit the highest level since December 2006, and a record 24.7% gain in July.
Forecasts ranged from a low of 6.3 million to a high of 6.68 million. The consensus forecast was 6.47 million. Year-over-year, sales are up 26.6% from a year ago (5.41 million in October 2019).
“Considering that we remain in a period of stubbornly high unemployment relative to pre-pandemic levels, the housing sector has performed remarkably well this year,” said Lawrence Yun, chief economist for NAR. “The surge in sales in recent months has now offset the spring market losses.”
The median existing-home price for all housing types was $313,000 in October, a 15.5% increase from October 2019 ($271,100). Prices increased in every region and this month marks 104 consecutive months of national year-over-year price gains.
Total housing inventory totaled 1.42 million units for the month, a decline of 2.7% from the prior month and down 19.8% from one year ago (1.77 million). Unsold inventory sits at an all-time low 2.5-month supply at the current sales pace, also down from 2.7 months in September and from the 3.9-month figure in October 2019.
“Homebuilders’ confidence has soared even though the actual production has not,” Mr. Yun said. “All measures, such as reduction to lumber tariffs and expansion of vocational training, need to be considered to significantly boost supply and construct new housing.”
The NAHB Housing Market Index (HMI) reported builder confidence soared another 5 points to 90 in November, smashing the all-time high and beating the consensus forecast. A reading above 50 indicates a positive housing market for new single-family dwellings.
Regional Breakdown for Existing Home Sales
Median home prices year-over-year rose by double-digits in each of the four major regions.
In the Northeast, existing home sales increased 4.7%, posting an annual rate of 900,000, up 30.4% from a year ago. The median price in the Northeast came in at $356,500, a gain of 20.2% from October 2019.
Existing home sales shot up 8.6% in the Midwest to an annual rate of 1,640,000, and are now up 28.1% from a year ago. The median price in the Midwest was $243,500, a gain of 16.7% from October 2019.
In the South, existing home sales gained 3.2% to an annual rate of 2.91 million, and are now up 26.5% from the same time one year ago. The median price in the South was $272,500, a 15.7% increase from a year ago.
Existing home sales in the West ticked up 1.4% to an annual rate of 1,400,000, and are now up 22.8% increase from a year ago. The median price in the West was $467,800, an increase of 15.1% from October 2019.