Existing Home Sales: Rebound Accelerated Further in October

Bottom Line: Record sales gains continued in October as supply of single-family homes fell to just 2.3 months worth of sales. Overall this was another strong report that confirmed housing activity will be an important driver of economic growth in the recovery. And the underlying trends confirm a secular shift away from more dense, urban living towards single-family homes. Existing Home Sales ROSE by 4.3% in October to 6.85 million, compared with market expectations for a decline to 6.47 million. The prior month was revised up from 6.00 to 6.57 million. Home re-sales are now 26.6% ABOVE their year-ago level but are 5.5% BELOW their September 2005 record high. The Inventory of Homes Available for Sale FELL by 2.7% to 1,420k and are now 19.8% BELOW their year-ago level. Because inventories declined while sales increased, the Months Supply FELL to 2.5 months from 2.7 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 12.3% ABOVE their year-ago levels while median home prices are 15.5% ABOVE their year-ago levels.