Pain in the West
October home sales were up 3.9 percent from a year ago and held above their average for the year. Sales dropped 8.7 percent in the West from the prior month and fell 3.2 percent in the South. These two regions, which are experiencing strong population growth, have seen large price increases due to tight inventory.
The supply squeeze is mostly hurting the lower end of the market, where sales have dropped sharply from a year ago.
View all Courses Last month, the number of unsold homes on the market fell 2.3 percent from September to 2.14 million units. Supply was down 4.5 percent from a year ago, a worrying sign as housing heads into a quiet season, the NAR said.
At October's sales pace, it would take 4.8 months to clear the stock of houses on the market, up from 4.7 months in September. A six-months supply is viewed as a healthy balance between supply and demand.
With inventories tight, the median house price increased 5.8 percent from a year ago to $219,600. October's price increase marked the 44th straight month of year-on-year gains.
Although higher prices could sideline potential buyers, especially those wanting to purchase a home for the first time, they are boosting equity for homeowners, which could encourage them to put their homes on the market.
Realtors and economists say insufficient equity has contributed to the tight housing inventories. Last month, the share of first-time buyers crept up from September to almost a third. But the share was still the second lowest since 1981 on an annual basis.
"First-time home buyers continue to be crowded out by competition from investor sales. Price pressures from low inventory present another headwind to first-time buyers," said Derek Lindsey, an economist at BNP Paribas in New York.
0 comments:
Post a Comment