Existing Homes: Sales, Inventories, and Prices Heading in the Desired Direction
Sales of all existing homes rose 9.4% to annual rate of 5.57 million in September after a 2.9% drop in the previous month. Single-family existing home sales also advanced 9.4% to an annual rate of 4.89 million units. The level of single-family existing home sales is at the highest mark since August 2007 and it is nearly 21% higher than the cycle low recorded in January 2009 (4.05 million units). Sales of existing homes rose across all four regions of the nation during September.
The inventory of unsold existing single-family declined to a 7.4-month supply in September from 8.9-month mark in August. The September I-S ratio is close to the historical median.
The median price of a single-family existing home in September fell 1.4% from the prior month to $174,900. On a year-to-year basis, the median price of an existing single-family home has declined 8.1% in September, smallest drop in a year.
Will data from the housing market continue to paint a favorable picture each month going forward? The short answer is “no.” Labor market conditions will need to show a significant improvement to bring about complete stability in the housing market. At the same time, the positive changes of the past six month are noteworthy. The headwinds of home foreclosures remain troubling. According to Realty Trac, home foreclosures have slowed on a month-to-month basis in August and September but the number of foreclosures in September was the third largest since January 2005. The Congressional Oversight Panel’s latest report has concluded that foreclosure mitigation programs are inadequate to address the problem (Congressional Oversight Panel Releases Assessment of Foreclosure Mitigation Efforts).
