Existing Single-Family Home Sales Rose Again as Prices Continue to Rise
Sales of existing homes increased 0.8 percent in October, to a 6.34 million seasonally adjusted annual rate (see first chart). Sales are still down 5.8 percent from a year ago. Sales in the market for existing single-family homes, which account for about 89 percent of total existing-home sales, rose 1.3 percent in October, coming in at a 5.66 million seasonally adjusted annual rate (see first chart). From a year ago, sales are down 5.8 percent. Condo and co-op sales decreased 2.9 percent for the month, leaving sales at a 680,000 annual rate for the month versus 700,000 in September (see first chart). From a year ago, condo and co-op sales are off 5.6 percent.
The dominant single-family segment saw sales rise in two regions of the country, fall in one region and come in unchanged in the fourth. Sales rose 4.4 percent in the Midwest and posted a gain of 1.2 percent in the South, the largest region by volume. Sales were off 3.1 percent in the Northeast, the smallest region by volume while sales were unchanged in the West. Sales are still down in all four regions measured from a year ago (-16.2 percent in the Northeast, -6.0 percent in the Midwest, -4.9 percent in the West, and -3.1 percent in the South).
The median sale price in October of an existing home was $353,900, 13.1 percent above the year ago price. For single-family existing home sales in October, the price was $360,800, a 13.5 percent rise over the past year. That pace is up from 13.3 percent in September but down from 24.5 percent in May (see third and fourth charts).
The median price for a condo/co-op was $296,700, 8.7 percent above October 2020 but slower than the 12-month gain of 9.3 percent in September and 21.0 percent in May (see third and fourth charts).
Persistent faster price gains for the single-family segment have resulted in a significant gap developing over the past decade. While median prices were about equal between 2004 and 2014, since 2014, faster price gains for the single-family segment have pushed the median price for existing single-family homes to more than 20 percent above the median condo price (see fourth chart).
Total inventory of existing homes for sale fell in October, declining 0.8 percent to 1.25 million, leaving the months’ supply (inventory times 12 divided by the annual selling rate) unchanged at 2.4; months’ supply was as low as 1.9 at the beginning of the year.
For the single-family segment, inventory was unchanged at 1.090 million and is 9.2 percent below the October 2020 level. The months’ supply was 2.3, unchanged from the prior month.
The condo and co-op inventory fell 1.8 percent to 163,000, pushing the months’ supply up to 2.9 from 2.8 in September.
Housing is likely to be volatile over the coming months as fundamentals adjust to changing market conditions.
Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
