U.S. existing home sales dropped in the month of September. Sales fell 2.2 percent sequentially to 5.38 million units. The outturn was much weaker than the consensus expectations of a fall of 0.7 percent. The fall was concentrated in the single-family market segment, where sales dropped 130k on the month. The smaller condo/co-op segment fared better, with sales rising 1.7 percent from August.
Home resales dropped throughout all regions, led by a fall of 3.1 percent in the Midwest, followed by pullbacks of 2.8 percent in the Northeast, 2.1 percent in the South and 0.9 percent in the West. At the current sales rate, unsold inventory is at a 4.1-month supply, a marginal change from the 4-months seen in August and down from the 4.4-months seen in September 2018. Low inventory levels continue to exert upward pressure on prices. The median existing home price rose 5.9 percent year-on-year in September – up from 5 percent sequentially.
Following two months of positive gains, existing home sales fell into negative territory in September again.
“On one hand, lower mortgage rates and a strong labor market have improved buying conditions. On the other, the duo of low inventory and rising home prices have kept a lid on the pace of sales expansion. As the two effects influence market activity, volatility in existing sales is expected to continue in the near term”, said TD Economics in a research report.
