September Existing Home Sales
Updated 19-Nov-09 19:26 ET
Highlights
- Existing home sales jumped 9.2% to 5.57 million units in September. The increase followed an unexpected decline (-2.9%) of sales in August.
- The consensus was expecting sales to rise by a much more modest 5.1% to 5.35 million units.
- The increase in sales helped push the total available supply down to 7.8 months.
- Median prices continue to fall and are now at $174,900. Prices will continue to trend down as long as distressed properties make a significant chunk of total sales.
Key Factors
- The jump in sales was mostly due to first-time homebuyers entering the market before the tax break ends in November. Sales will continue to go higher in October and November before falling significantly in December.
- Beyond the headline sales numbers, there was another good piece of news from the data release. Distressed properties, which accounted for almost 50% of sales throughout the spring and summer, have declined significantly to only 29%. Sales of non-distressed homes make it more likely that consumers will start looking at more expensive properties as homeowners move up the pricing ladder.
Big Picture
- Existing home sales seem to have reached a bottom and growth has resumed. However, sales will remain subdued while distressed properties continue to work through the system.
| Category |
SEP |
AUG |
JUL |
JUN |
MAY |
| Existing Home Sales |
5.57M |
5.09M |
5.24M |
4.89M |
4.72M |
| Months Supply |
7.8 |
9.3 |
9.3 |
9.4 |
9.8 |
| Median Price Y/Y |
-8.5% |
-12.7% |
-13.6% |
-15.3% |
-16.0% |
