National home sales expected to top 6M by the end of 2021.
Though Market Slowing, Existing Home Sales Remaining Resilient
According to the National Association of REALTORS® (NAR) latest monthly existing home sales report, the resiliency of the 2021 housing market is expected to push sales beyond 6M homes to the highest volume since 2006.
Fannie Mae agrees with NAR that both new and existing home sales will top +6M by year’s end.
In October, existing home sales increased by only +0.8% m/m. This modest monthly gain, reflecting a cooling market overall, marked the second straight month of a growing housing metric. However, on a year-over-year basis, existing sales dropped -5.8%
NAR’s chief economist Lawrence Yun said, “Home sales remain resilient, despite low inventory and increasing affordability challenges.” Yun pointed to inflationary price jumps in both rent and consumer prices as reasons enough for prospective yet reluctant buyers to take the home ownership plunge. Having a consistent, fixed mortgage payment that stays the same over time in light of skyrocketing rent jumps.
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Inventory Continued Downward Slide
Inventory across the country among all housing types decreased -0.8% m/m at the end of October. Annually, inventory slid -12% to just 1.25M units. 1.25 housing units translated into 2.4 months of supply, consistent with inventory levels in September.
Home Prices Continued Climbing in October
The median existing home price jumped +13.1% y/y from $313,000 in October 2020 to $353,900 inn October 2021. Interestingly, October 2021 marked the 116th consecutive month of year-over-year increases in home prices, another new record.
The median existing single-family home price skyrocketed +13.1% y/y to $360,800 in October.
Yun believes that remote working has enabled rising home prices, particularly in “destination “markets where wealthy and remote workers have migrated.
Yun said, “Among some of the workforce, there is an ongoing trend of flexibility to work anywhere, and this has contributed to an increase in sales (and prices) in some parts of the country. Record-high stock markets and all-time high home prices have worked to significantly raise total consumer wealth and, when coupled with extended remote work flexibility, elevated housing demand in vacation regions.”
Composition of Home Buyers in October
First-time buyers accounted for 29% of home sales in October, a monthly increase of +1% from September and an annual decrease of -3%.
Individual investors accounted for 17% of all home sales in October, up +4% from September, and up from 14% in October 2020.
Nearly 25% of all transactions were all-cash deals, up from 23% in September and up from 19% in October 2020.
Regional Sales Differences
Take a look at the changes in regional home sales:
- Midwest – +4.2% m/m existing sales; -6.3% y/y existing sales; median price hit $259,800, an increase of +7.8% y/y
- South – +0.4% m/m in existing sales; -3.5% y/y; median home price hit $313,500, +16.1% y/y
- West – steady m/m existing sales; -5.1% y/y; median home price hit $507,200, +7.7% y/y
- Northeast – -2.6% m/m existing sales; -13.8% y/y; median home price hit $379,100, +6.4% y/y
Thanks to the National Association of REALTORS®, Freddie Mac and Inman.