September 2015 Existing Home Sales Headlines Say Sales Up

The headlines for existing home sales say “while current price growth around 6 percent is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace“. Our analysis of the unadjusted data shows that home sales improved – but that the rolling averages declined.

Econintersect Analysis:

Unadjusted sales rate of growth accelerated 2.8 % month-over-month, up8.0% year-over-year – sales growth rate trend declined using the 3 month moving average.

Unadjusted price rate of growth accelerated 1.0 % month-over-month, up 3.9 % year-over-year – price growth rate trend is modestly slowing using the 3 month moving average.

The homes for sale inventory significantly declined this month, remains historically low for Septembers, and is down 3.1 % from inventory levels one year ago).

NAR reported:

Sales up 4.7 % month-over-month, up 8.8 % year-over-year.

Prices up 6.1 % year-over-year

The market expected annualized sales volumes of 5.250 to 5.500 million (consensus 5.35 million) vs the 5.55 million reported.

Unadjusted Year-over-Year Change in Existing Home Sales Volumes (blue line) – 3 Month Rolling Average (red line)

z existing1.PNG

The graph below presents unadjusted home sales volumes.

Unadjusted Monthly Home Sales Volumes

z existing2.PNG

Here are the headline words from the NAR analysts:

Lawrence Yun, NAR chief economist, says a slight moderation in home prices in some markets and mortgage rates remaining below 4 percent gave more households the confidence to close on a home last month. “September home sales bounced back solidly after slowing in August and are now at their second highest pace since February 2007 (5.79 million),” he said. “While current price growth around 6 percent is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace.”

“Despite persistent inventory shortages, the housing market has made great strides this year, backed by an increasing share of pent-up sellers realizing the increased equity they’ve gained from rising home prices and using it towards trading up or moving into a smaller home,” says Yun. “Unfortunately, first-time buyers are still failing to generate any meaningful traction this year.”

NAR President Chris Polychron says Realtors® strongly back the passing of H.R. 3700, the “Housing Opportunity Through Modernization Act of 2015.” Polychron testified in support of the bill yesterdaybefore the U.S. House Financial Services Subcommittee on Housing and Insurance. “This bill helps expand homeownership and rental housing opportunities at all levels and specifically includes changes to Federal Housing Administration policies that limit the flexible and affordable financing needed by many potential condo buyers — especially first-time buyers.”