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Existing Home Sales: Surprising Rebound

October 21, 2021
Bottom Line: Sales rose more than expected in September, rebounding to the fastest pace since January on a seasonally adjusted basis. The trend remains towards deceleration after extremely robust sales in the 2nd half of last year. While these data are encouraging that the slowdown won't prove overly abrupt, September's rebound could be a case of potential buyers closing deals as mortgage rates started to edge higher. Tight supply conditions remained a major issue as inventories fell in September, but average home prices fell for the third straight month. While this is mostly a result of the composition of sales shifting towards lower-cost homes, it hints at some easing of tightness. Overall. the housing tailwind for GDP growth will be notably lower in the 2nd Half of 2021.
Existing Home Sales ROSE by 7.0% in September to 6.29 million, compared with market expectations for an increase to 6.10 million. There were no revisions to prior data. Home re-sales are now 2.3% BELOW their year-ago level.

The Inventory of Homes Available for Sale
FELL by 0.8% to 1,270k and are now 13.0% BELOW  their year-ago level. Because inventories declined while sales increased, the Months Supply FELL to 2.4 months from 2.6 months.  This is BELOW the 6-month level that is considered normal.

Home Prices
ROSE compared to their year-ago levels. Average home prices are 8.6% ABOVE their year-ago levels while median home prices are 13.3% ABOVE their year-ago levels.