Existing Home Sales Dip 1.6 Percent Year-Over-Year in September 2017, But Surprisingly Rose 0.7 Percent from August

Given the Hurricanes Harvey and Irma, consensus was for declining existing home sales year-over-year and sequentially from August.  While sales dipped 1.6 percent in September 2017 versus a year ago, sales edged up slightly (0.7 percent) from August according to the National Association of Realtors® (NAR) to a 5.39 million seasonally adjusted annualized rate (SAAR).  Median price rose to $245,100, a gain of 4.2 percent from a year ago.   Median home prices have now risen 67 consecutive months on a year-over-year basis.

The following graph shows the monthly median price and the total number of home sales in the prior 12 months commencing January 2014.  Total housing sales  (raw monthly data – not seasonally adjusted) for the 12-month period ending September 2017 of 5.50 million was up 2.25 percent versus the 12-months ending September 2016 (5.38 million).

The next graph shows the monthly raw data (not seasonally adjusted) for each month commencing January 2014.  Following that are median prices for the same time period.  With just a 4.2 month estimated inventory (with six months considered normal), supply continues to trail demand, resulting in rising home prices.  The 1.9 million listings for sale as of the end of September was down 6.4 percent compared to a year ago.

 

Other metrics and insights from the NAR release included:

  • Distressed sales made up one-in-every 25 September closings (4 percent): 3 percent were foreclosures and 1 percent short sales
  • 48 percent of the homes sold in September 2017 were on the market for less than one month
  • Typical days on the market for all properties was 34 days in September
  • All-cash sales made up one-out-of-every five transactions (20 percent), down slightly from 21 percent a year ago
  • Investors bought 15 percent of all home sales – unchanged from a year ago
  • First-time homebuyers made up three-out of every ten transactions (29 percent), down from 34 percent a year ago

To read the full news release from NAR regarding September 2017 existing homes sales click https://www.nar.realtor/newsroom/existing-home-sales-inch-07-percent-higher-in-september

All said, given the minimal 4.2 months of inventory and hurricanes that literally shut down the entire state of Florida for a week and more than 30 percent of Texas, housing sales held up well.  Interest rates remain highly affordable, and while rental rates were flat in many markets, homes were as or more affordable to renting in a major part of the U.S.

Ted

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