ECON: Drop in Existing Home Sales is in Line with Expectations
- Sept Sales at 5.29 mln annual rate vs 5.30 forecast
- Aug sales revised down to 5.39mln from 5.48 mln
- Inventory +1.8 pct to 2.21 mln units
- First year-over-year increase in inventory since 2011
- Median price drops from $209k to 199k
- 14 pct distressed sales vs 12 pct previously
- Market Reaction: Stock prices higher and bond markets weaker, despite negative revision and headline miss.
After hitting the highest level in nearly four years, existing-home sales declined in September, but limited inventory conditions continued to pressure home prices in much of the country, according to the National Association of Realtors®.
Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 1.9 percent to a seasonally adjusted annual rate of 5.29 million in September from a downwardly revised 5.39 million in August, but are 10.7 percent above the 4.78 million-unit pace in September 2012. Sales have remained above year-ago levels for the past 27 months.
Lawrence Yun, NAR chief economist, said a decline was expected. “Affordability has fallen to a five-year low as home price increases easily outpaced income growth,” he said. “Expected rising mortgage interest rates will further lower affordability in upcoming months. Next month we may see some delays associated with the government shutdown.”