Existing home sales in the U.S. surged above expectations in the month of October. Sales grew 4.3 percent to 6.85 million units, as compared with a modest pullback to 6.46 million. This is the fifth straight monthly gain for the series.
The rise was seen in both segments of the market. Sales of single-family homes grew 4.1 percent to 6.12 million units, while condo/co-op sales were up 5.8 percent to 730k units. Sales rebounded throughout all four regions, with the Midwest leading the way, followed by more moderate gains in the Northeast, South and West.
The number of homes available for sale dropped 19.8 percent year-on-year at 1.42 million units. At the present sales rate, unsold inventory is at 2.5-month supply. Home prices continued to grow at a brisk pace in the midst of a low inventory backdrop. The median existing home price rose 15.5 percent year-on-year.
The report released today further strengthens the theme that the housing market is a major bright spot in the U.S. economy.
“With little in the way of supply, price increases have overwhelmed the positive impact of record-low mortgage rates on housing affordability. This is likely to lead to a more moderate pace of sales growth going forward”, noted TD Economics in a research report.
However, major positive developments on the vaccine front imply a potentially earlier return to normal in 2021, boding well for the economy and the housing market, added TD Economics.