Existing home sales eased slightly in October, dipping back for a second month in succession, falling, in all, by 3.2% to an annualized rate of 5.12 million homes. The data were provided by the National Association of Realtors (NAR), a leading trade group of the real estate industry.
At the same time, lean inventory levels mean that home prices continue to see double-digit year-over-year gains. In all, sales, as noted, eased to 5.12 million homes sold last month. That was down from 5.29 million homes sold in September. Still, the latest total remained 6.0% above the October, 2012 rate of 4.83 million homes.
Importantly, sales have remained above year-earlier levels for 28 months, attesting to the staying power of this recovery, which, at worst, seems to be hitting some occasional speed bumps along the way.
Meanwhile, Lawrence Yun, the Chief Economist of the NAR said that the flattening out was not unexpected, given the recent modest erosion in buying power. Also, the low inventory levels across the country, he opines, is holding back sales. The low supply can make sellers rather emboldened leading to less pricing flexibility.
And on the price front, the national median existing home price was $199,500 in October, up 12.8% from October of 2012. This was the 11th consecutive month of double-digit percentage price increases on a year-to-year basis.
Also, sales of distressed homes, which include foreclosures and short sales, accounted for just 14% of all sales last month. A year ago, they accounted for fully one-fourth of all sales. At their peak, such sales, which clearly depress the aggregate price level, had been about one-third of all sales.
Finally, the median time on the market for all homes sold was just 54 days this past month. A year ago, that rate of 71 days. It had taken homes much longer to dispose of at the trough of the down cycle.
All in all, this was a slightly disappointing report, but one that does not change the overall outlook for this sector, which remains one of the more formidable in our economy, at this time. At the time of this article's writing, the author did not have positions in any of the companies mentioned.