Existing Home Sales Edge Over Expectations

For the first time in the last seven reports, existing home sales did not come in below Econoday's consensus. But at a 5.220 million annualized rate in October, they only edged over expectations for 5.210 million. Year-on-year, sales contraction actually deepened in October, by 1 percentage point to minus 5.1 percent.

Both single-family homes and condos showed monthly gains, up 0.9 percent and 5.3 percent respectively. Year-on-year contraction is at 5.3 percent for the key single-family category, which clearly underscores the weakness of this year's housing market, and down 3.2 percent for condos.

Hurricane Michael hit Florida and Georgia in October though sales in the South nevertheless managed a 1.9 percent monthly rise. Sales in the West were strongest at plus 2.8 percent with the Northeast at plus 1.5 percent but the Midwest at minus 0.8 percent.

Sales may have gotten a boost from discounting as the median price fell 0.6 percent to $255,400. Year-on-year, the median is up 3.8 percent which is sizably above the decline in sales which points to further discounting ahead.

Supply fell in October, down 1.6 percent for a second straight month to 1.850 million resales on the market. Relative to sales, the latest supply reading is 4.3 months vs September's 4.4 months.

Mortgage rates are on climb and are an increasing headwind for what is an exhausted housing market. Still, today's results are the first climb for resales since May and may help support expectations for next week's sales report on new homes.