US: Existing home sales rise solidly in October - Wells Fargo

Today’s US economic data included the release of the Existing home sales report that showed a gain of 2.0% in October.  The inventory of homes available for sale continues to decline, which is restraining sales and keeping pressure on selling prices, explained analysts from Wells Fargo. 

Key Quotes: 

“Sales of existing homes rose solidly in October, as hurricane-related disruptions eased somewhat. Home sales slow during the fall and winter, so unusual swings due to weather events often exaggerate the month-tomonth changes. Existing home sales measure closings and homes in the impacted areas would likely need to be re-inspected and repaired before loans could be closed.”

“October’s 2.0 percent overall gain follows a revised 0.4 percent rise in September. Those back-to-back gains, however, came on the heels of three consecutive monthly declines during the summer. Even with the gains the past two months, existing home sales remain 0.9 percent below their year ago level.”

“People simply are not moving as much as they used to. The proportion of the population that moved within the past year fell to a modern era low of just 11.0 percent. The peak year for movers was 1985, at 20.2 percent.”

“A more immediate problem for potential movers is the lack of homes available for sale. Many homeowners are reluctant to put their home on the market because they are afraid they will not find a more desirable home to purchase before their current home sells.”

“The total number of existing homes available for sale at the end of October fell 3.2 percent from the prior month to 1.80 million homes and is now 10.4 percent lower than it was one year ago. The inventory of existing homes has fallen year-to-year for the past 29 months. Unsold inventory amounts to just a 3.9–month supply at the current sales pace, down from 4.4 months one year ago.”

“With inventories tight, properties are selling quickly, particularly homes priced around the current median of $247,000. The typical home was on the market for just 34 days in October, which is down from 41 days one year ago.”