U.S. existing home sales fall sequentially in September
Source: FxWire Pro - Commentary / 21 Oct 2018 10:12:51 America/New_York
U.S. existing home sales dropped in the month of September. On a sequential basis, existing home sales fell 3.4 percent to 5.14 million units, the lowest level since November 2015. Market expectations were for a decline of 0.9 percent.
Home resale activity dropped throughout all regions except the Midwest, which stayed the same. Sales in the South led the way, recording a fall of 5.4 percent. This was followed by the West and Northeast, which recorded a fall of 3.6 percent and 2.9 percent, respectively.
The number of homes available for sale dropped to 1.88 million units from 1.91 million units in August. Even so, it was still up 1.1 percent year-on-year. Homes usually stayed on the market for 32 days – up from 29 days in August, but down from 40 days a year ago. Median existing home prices rose 4.2 percent year-on-year. This is slightly below the 4.6 percent seen in the earlier month.
Affordability is evidently an issue as mortgage rates have risen and income growth has stayed below that of home prices. A lack of inventory is adding to the rise in prices. Though inventory levels rose on a year-on-year basis, they continue to be low compared to history. In the meantime, new housing construction faces headwinds in the way of rising labor and input costs, which has also exerted upward pressure on home prices, noted TD Economics in a research report.
“Fundamentally, the pace of construction should continue to march higher and housing demand remain supported by a strong job market. In the meantime, the current dynamics of limited existing inventory and moderate new supply are contributing to the affordability crunch and slowing the pace of improvement” added TD Economics.
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