ARLINGTON, Va.—Waiting on housing market conditions to change before taking the plunge on a new home? You might want to find a comfortable chair in your current abode, according to one analyst, who said the market is likely to remain frothy for some time to come.
Curt Long
Curt Long
Existing home sales rose 0.8% in October to a seasonally adjusted annual rate of 6.34 million units, a 5.8% decrease in sales versus a year ago.
NAFCU's Curt Long noted that sales “marched on in October” following the rise in September.
"Outside of last winter's surge which made up for missed sales following COVID-19's arrival, present sales are at their highest level since 2006," said Long, NAFCU's chief economist and vice president of research. "According to Freddie Mac, the average rate on a 30-year mortgage increased by 17 basis points in October, but that has not made a meaningful dent in sales."
Sales rose in two regions this month. The Midwest saw the largest rise, gaining 4.2% on the month, followed by the South (+0.4%). Sales in the West were flat, and the Northeast region slipped by 2.6%.
Median Price Up Again
The median existing home price increased from $352,800 in September to $353,900 in October (not seasonally adjusted) – representing a 13.1% increase from a year ago.
Based on current sales, there were 2.4 months of supply at the end of October, which matched September. Analysts consider six months of inventory a rough balance between supply and demand.
"It will take a large reduction to demand to impact sales levels and the pace of price appreciation," added Long. "Inventory levels remained near all-time lows in October, but the fact that rental prices are also increasing rapidly reduces the effects of home price growth. There are some promising developments on the construction front, but that will take time to make an impact in the resale market. NAFCU expects housing to continue on its present trajectory for the foreseeable future.”
NAFCU's Curt Long noted that sales “marched on in October” following the rise in September.
"Outside of last winter's surge which made up for missed sales following COVID-19's arrival, present sales are at their highest level since 2006," said Long, NAFCU's chief economist and vice president of research. "According to Freddie Mac, the average rate on a 30-year mortgage increased by 17 basis points in October, but that has not made a meaningful dent in sales."
Sales rose in two regions this month. The Midwest saw the largest rise, gaining 4.2% on the month, followed by the South (+0.4%). Sales in the West were flat, and the Northeast region slipped by 2.6%.
Median Price Up Again
The median existing home price increased from $352,800 in September to $353,900 in October (not seasonally adjusted) – representing a 13.1% increase from a year ago.
Based on current sales, there were 2.4 months of supply at the end of October, which matched September. Analysts consider six months of inventory a rough balance between supply and demand.
"It will take a large reduction to demand to impact sales levels and the pace of price appreciation," added Long. "Inventory levels remained near all-time lows in October, but the fact that rental prices are also increasing rapidly reduces the effects of home price growth. There are some promising developments on the construction front, but that will take time to make an impact in the resale market. NAFCU expects housing to continue on its present trajectory for the foreseeable future.”
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