September 2016 Existing Home Sales Stem a Two Month Slide – Up 3.2 Percent from August and 0.6 Percent Year-Over-Year

After declining year-over-year for two consecutive months, existing home sales turned the corner in September 2016 with sales up 3.2 percent sequentially from August and 0.6 percent versus a year ago on a seasonally adjusted annualized rate (SAAR) according to the National Association of Realtors® (NAR). On a non-seasonally adjusted basis, September 2016 existing home sales were at 484,000, a gain of 2.76 percent.

The following graph shows total monthly existing home sales for 2014, 2015 through September 2016 on a non-seasonally basis. Note that in 2016, every month except July had more home sales than either 2014 or 2015.

10-21-16 graph1

The September 2016 median home price of $234,200 was up 5.64 percent versus a year ago, 12.0 percent from two years ago and 18.0 percent compared to three years ago . Unlike the number of sales, median home prices have increased on a year-over-year basis every month since March 2012 – a run of 55 consecutive months. The following graph shows the median price monthly since 2014.

10-21-16 graph2

The following graph shows both existing home sales on a seasonally adjusted basis plus median home prices (not seasonally adjusted).

10-21-16 graph3

Other metrics and data in the NAR release included:

  • 1st time home buyers made up 34 percent of all transactions – the most since July 2012, and up from 29 percent a year ago
  • Distressed sales made up a miniscule 4 percent of all September transactions, compared to 7 percent a year ago. September was the lowest percentage of distressed recorded since NAR commenced collection of these data in 2008
  • Foreclosures made up just 3 percent of all sales last month and sold at an average 15 percent discount when compared to non-distressed transactions
  • Short sales represented just 1 out of every 100 transactions (1 percent) and sold at an average 11 percent discount
  • 44 percent of September home sales were on the market less than 1 month, with a 39 day average for all types of sales. Short sales were on the market the longest at 118 days, foreclosures 67 days and non-distressed properties 38 days
  • Buyers paid all-cash in 1 out of every 5 transactions (21 percent) compared to 24 percent a year ago
  • Investors acquired 14 percent of all home sales in September, paying all-cash 65 percent of the time
  • The following table shows year-to-date single family, multifamily and total home sales year-to-date for 2015 and 2016

10-21-16 table

To read the entire NAR press release and also access supporting data series click http://www.realtor.org/news-releases/2016/10/first-time-buyers-steer-existing-home-sales-higher-in-september

My current model is forecasting a 6.4 percent increase in 2017.

Job growth, time and interest rates will tell.

Ted

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