Existing Home Sales Show Solid Increase

Existing home sales rose a solid 2.4 percent in September to a higher-than-expected annual rate of 5.17 million. Year-on-year, however, sales remain flat at minus 1.7 percent. Condo sales were the strongest in the month, up 5.2 percent to a 0.610 million rate though sales of single-family homes rose a solid 2.0 percent to a 4.56 million rate. Year-on-year, condo sales show no change with single-family homes at minus 1.9 percent.

The strength in sales moved supply off the market, to a total of 2.30 million homes and condos on the market vs 2.31 million in the prior week. Supply relative to sales fell to 5.3 months vs 5.5 months in August.

Home prices have been falling, which of course are a plus for sales, and are down 4.0 percent on the month to a median $209,700. Year-on-year, the median price is up 5.6 percent.

Regional sales data show the West with a 7.1 percent monthly gain followed by the largest region which is the South at a 5.0 percent gain. The Northeast, which is the smallest region, shows a 1.5 percent rise while the Midwest is the only region in the negative column in the month, at minus 5.6 percent.

The housing market has been flat but today's report offers a hint of good news, especially given this month's sharp decline in mortgage rates and the steady improvement underway in the labor market. Financial markets are showing little initial reaction to today's report.

Recent History Of This Indicator:
Existing home sales fell back 1.8 percent in August to a lower-than-expected annual rate of 5.05 million. Year-on-year, sales were down 5.3 percent, a bit more steep than minus 4.5 percent in the prior month. Limited supply has been a major factor holding down sales with supply on the market falling 40,000 homes in the month to 2.31 million. Supply relative to sales, at 5.5 months, held unchanged reflecting August's sales dip. With recent weakness in pending home sales and home prices, this will be an important update on housing.