US existing home sales advanced further in September, hitting the highest point since May 2006.
National Association of Realtors (NAR) chief economist Lawrence Yun said Thursday that it was “another spectacular month” for sales and prices, but noted again that supply is being depleted rapidly. He said that the housing sector is experiencing better than a V-shaped recovery.
Data released Thursday by the NAR showed that overall existing home sales rose by 9.4% to a 6.54 million annual rate in September, well above expectations for a 6.20 million rate. Sales were revised down to a 5.98 million rate in August.
Single-family existing home sales rose by 9.7%, while condo sales were up 6.3%. The year/year rates were sharply higher.
There were sales gains in all four regions of the country, led by the Northeast region.
Inventory of homes for sale fell by 1.3% in September and was down 19.2% from its level a year ago due to the very brisk pace of sales. The 1.470 million homes available for sale was the lowest for a September on record.
When combined with the sales gain, the month’s supply fell to 2.7 months from 3.0 months in August and 4.0 months a year ago and is also the lowest for a September on record.
The median sales price of existing home rose by 0.5% in September to $311,800, up 14.8% year/year.
Yun noted that due to rising prices, home affordability is particularly challenging, especially for first time buyers. The percentage of first time buyers and investors shifted lower, while the proportion of trade-up buyers increased.
New home construction for single-family homes surged in September, based on data released on Tuesday, which should lift the supply of new homes for sale and allow current owners to trade up and put their existing homes on the market.
Existing Home Sales
Source: National Association of Realtors
Released earlier on Thursday, initial jobless claims fell by 55,000 to 787,000 in the October 17 employment survey week, well below the 866,000 in the September 12 survey week. While a decline in claims is usually a sign of economic improvement, it may suggest that workers are running out of eligibility to file.
Analysts had expected 868,000 claims in the current week.
California finally reported actual claims for the last three weeks after using placeholder values for those weeks. The result was large revisions to the previous two weeks.
The four-week moving average including the revisions fell by 21,500 to 811,250 in the week, as a level of 873,000 in the September 19 week rolled out of the equation.
The level of continuing claims fell by 1.024 million to 8.373 million in the October 10 week, the lowest point since the start of the pandemic. Those that filed early in the shutdowns and were due six months of benefits are falling out of the rolls.