The Real Deal New York

Sales of existing US homes fall for second-straight month

Supply shortage is squeezing volume, pushing up pricing
November 21, 2017 01:50PM

NAR’s Elizabeth Mendenhall

Existing-home sales fell year-over-year for the second-straight month in a row a seasonally adjusted rate of 5.48 million in October, according to the National Association of Realtors.

But the slowdown is more the result of a dearth of homes for sale than sluggish demand, the Wall Street Journal reported.

“The housing market largely remains stuck in the same, predictable rut it has been in for the past two years or so” of demand outpacing supply, Zillow chief economist Svenja Gudell told the newspaper.

Sales did increase between September and October by 2 percent, due in part to areas in Texas and Florida that had been hit by hurricanes showing improved activity. The south, however remains “the weakest link when it comes to existing home sales in the nation,” said Chris Rupkey, chief financial economist for the financial firm MUFG.

Inventory has fallen year-over-year for 29 consecutive months, and was by 10.4 percent in October from a year earlier. It would take just 3.9 months to deplete the current supply of homes on the market, according to NAR, which is the lowest October reading since the group began tracking the data in 1999.

That supply shortage is driving up prices. The median price of homes sold last month climbed 5.5 percent from October 2016 to $247,000.

Experts said the housing market could experience volatility as a result of the GOP’s tax overhaul plan, which could slash the limit on the mortgage interest deduction from $1 million to $500,000 and scale back or eliminate state and local tax deductions. [WSJ]Rich Bockmann