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NAFCU predicts more 'modest' growth as existing-home sales rise in October
Existing-home sales rose 1.9 percent in October to a seasonally adjusted annual rate of 5.5 million units, with sales decreasing only in the West region. NAFCU Chief Economist and Vice President of Research Curt Long reacted to the growth and noted that the market is still constrained by supply in a Macro Data Flash report.
"Mortgage rates continue to be low, driving some demand. Months of supply has ticked down, indicating a tighter market which will put upward pressure on prices," said Long.
Based on current sales, there were 3.9 months of supply at the end of October, down 0.2 months from September. Analysts consider 6 months of supply to be roughly balanced between supply and demand.
The median existing home price also decreased, down from $272,100 in September to $270,900 in October. That amount represents a 6.2 increase from the median price a year ago.
"Housing starts have risen this year and permits to build are at a 12-year high, but that supply relief is months away," Long added. "NAFCU expects more modest growth with some fluctuation in the housing market."
Sales increased in all three regions during the month: sales in the South grew 7.8 percent, in the West 3.7 percent, and in the Midwest 2.4 percent.