Existing Home Sales: Modest Decline From Record Levels
December 22, 2020
Bottom Line: Sales fell modestly in November after record sales gains in October as the inventory of home available for sale fell. Supply remained very tight with inventory equivalent to just 2.3 months of sales. Overall the trend remained strong. Housing activity will remain an important driver of economic growth in the recovery as the underlying trends confirm a secular shift away from more dense, urban living towards single-family homes. Existing Home Sales FELL by 2.5% in November to 6.69 million, compared with market expectations for a decline to 6.70 million. The prior month was revised up from 6.85 to 6.86 million. Home re-sales are now 25.8% ABOVE their year-ago level but are 7.7% BELOW their September 2005 record high. The Inventory of Homes Available for Sale FELL by 9.9% to 1,280k and are now 22.0% BELOW their year-ago level. Because inventories declined while sales declined, the Months Supply FELL to 2.3 months from 2.5 months. This is still well BELOW its July 2010 cyclical peak of 12.4 (which was its highest level since 1982) and well BELOW the 6-month level that is considered 'normal'. Home Prices ROSE compared to their year-ago levels. Average home prices are 11.3% ABOVE their year-ago levels while median home prices are 14.6% ABOVE their year-ago levels.
Article by Contingent Macro Advisors