September 2017 Existing Home Sales
Submitted by Atlas Indicators Investment Advisors on October 24th, 2017
Sales of existing homes moved against the recent declining trend during September 2017, increasing 0.7 percent. Rising to an annualized rate of 5.39 million units, this is the first uptick in four months. While the monthly move was up, the year-over-year tally dropped 1.5 percent which is the first annual decline since July 2016. Of course, weather-related issues along the Gulf Coast probably stifled some transaction volume.
Regional data were mixed but skewed negatively. Northeast sales were unchanged for the month but are now 1.4 percent lower than a year earlier. Midwest transactions grew 1.6 percent but fell 1.5 percent compared to September 2016. Sales in the South declined 0.9 percent, and the year-over-year count dropped 2.3 percent. Finally, the West increased 3.3 percent during the month but remained unchanged versus 12 months ago.
Interest rates were the lowest since November 2016 according to Freddie Mac. The average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 3.81 percent from 3.88 percent in August. For some context, the average commitment rate for all of 2016 was 3.65 percent.
Inventories rose 1.6 percent in the period. There are roughly 1.9 million existing homes for sale in America. However, the supply remains 6.4 percent lower than a year earlier. At the current pace of sales, it would take just 4.2 months to exhaust the nation’s stock of existing homes, down from 4.5 months a year ago.
Price proxies fell for the third consecutive month. An average home cost $286,700 which is down from the June peak of $303,500. Likewise, the median-priced home set the buyer back $245,100 and is also down from a peak of $263,300 in June.
In the past year, only August’s pace was slower than this iteration. There is some weakness showing in the national numbers. Of course, as the Gulf Coast recovers, there will likely be an uptick in the South region, so the other three parts of the country could prove more useful in discovering the status of the existing housing market during the next several months and quarters.
