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Existing Home Sales: Few Signs of Impact from Higher Rates

December 21, 2016
Bottom Line: Existing home sales rose more than consensus in November as some buyers expedited their purchases in response to mortgage rates that started to move higher from historically low levels. Home re-sales have averaged 5.56 million over the past 3 months and 5.49 million over the past 6 months, suggesting that the housing market is still improving. Inventories of homes available for sale dropped again, pushing months’ supply back near the lows for both single-family and multi-family homes. That is driving home prices and rents higher. The median home price is now up 6.8% from year ago levels to 235k.

Existing Home Sales ROSE by 0.7% in November to 5.61 million, compared with market expectations for a decline to 5.50 million. The prior month was revised down from 5.60 to 5.57 million. Home re-sales are now 15.4% ABOVE their year ago level but are 22.6% BELOW their September 2005 record high.

42.8% of single family homes sold were priced in between 100k to 250k and 32.2% of single family homes sold were priced in between 250k to 500k. Single family home sales are up 20.7% year-over-year for prices in between 100k to 250k and are up 35.4% for prices in between 250k to 500k.

The Inventory of Homes Available for Sale FELL by 8.0% to 1,850k and are now 9.3% BELOW their year ago level. Because inventories declined while sales increased, the Months Supply FELL to 4.0 months from 4.3 months. This is still well BELOW its July 2010 cyclical peak of 12.4 (which was its highest level since 1982) and even BELOW the 6 month level that is considered 'normal'.

Home Prices ROSE compared to their year ago levels. Average home prices are 4.9% ABOVE their year ago levels while median home prices are 6.8% ABOVE their year ago levels.