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Existing home sales underperformed in October

22 November 2017

The industry data showed that home resales increased by in October to a seasonally adjusted from 5.39 million units in the previous month.

"While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated", he said.

For a second consecutive month in October, home sales declined slightly in CT from a year earlier even as markets across the Northeast stayed flat from October 2016.

Sales of existing homes posted a 2% gain in October but remain 0.9% below where they were a year earlier.

The months supply of homes for sale dropped 9 percent at the end of October to 6.1 months supply.

At October's sales pace, it would take 3.9 months to exhaust the current inventory, down from 4.2 months in September.

'The residual effects on sales from Hurricanes Harvey and Irma are still seen in parts of Texas and Florida.

The Realtors group said it expected activity in the areas affected by the storms to fully recover by the end of the year.

"Roughly half of what's available to buy is priced in the upper one-third of home values, leaving scant options for those aging millennials and young families trying to get their foot in the door", said Svenja Gudell, chief economist at Zillow.

Economists and realtors say a 40 percent share of first-time buyers is needed for a robust housing market.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage rose to 3.90 percent in October (matches highest rate since June) from 3.81 percent in September. But construction rose just 2.4 percent from a year ago.

Distressed sales5 - foreclosures and short sales - were 4 percent of sales in October, unchanged from last month and down from 5 percent year ago.

The tight supply is pushing up prices and thwarting many would-be home buyers. The year-to-date (Jan. 1 - October 31) statewide median sales price was $250,000, an increase of 6.2 percent from the same period in 2016. The number of homes for sale stood at 69,321 in October, a decrease of 6.6 percent compared to October 2016. The median price in the Midwest was $194,700, up 7.1 percent from a year ago.

"In October and throughout 2017 strong homebuyer demand and low inventory combined to drive sales prices higher", said Duncan R. MacKenzie, CEO of the New York State Association of REALTORS. The median price in the South was $214,900, up 4.6 percent from a year ago.

All-cash sales continued on the same pace as in September, at 20 percent, but were down from 22 percent a year earlier.

Existing home sales underperformed in October