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Existing Home Sales: 3rd Straight Month of Higher Sales

December 20, 2017

Bottom Line: Existing home sales rose sharply more than expected and were higher for the third straight month. While there remained some impact from the hurricanes, overall national activity eclipsed the cycle highs seen earlier this year. Inventory levels continue to show a very tight market with months' supply hitting a new low. Overall, the hurricane induced activity has so far been enough to keep activity strong ahead of tax changes and potential further interest rate hikes that have the potential to impact sentiment dramatically into 2018. It is still too early to say this is a renewed uptrend after the slower summer selling season.

Existing Home Sales ROSE by 5.6% in November to 5.81 million, compared with market expectations for an increase to 5.53 million. The prior month was revised up from 5.48 to 5.50 million. Home re-sales are now 3.8% ABOVE their year ago level but are 19.9% BELOW their September 2005 record high.

41.5% of single family homes sold were priced in between 100k to 250k and 34.0% of single family homes sold were priced in between 250k to 500k.
Single family home sales are up 0.6% year-over-year for prices in between 100k to 250k and are up 9.2% for prices in between 250k to 500k.

The Inventory of Homes Available for Sale FELL by 7.2% to 1,670k and are now 9.7% BELOW their year ago level. Because inventories declined while sales increased, the Months Supply FELL to 3.4 months from 3.9 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 4.8% ABOVE their year ago levels while median home prices are 5.8% ABOVE their year ago levels.

Article by Contingent Macro Advisors