Friday, September 23, 2016

Housing Inventories Down 10.1% Compared to One Year Ago

New housing statistics show a fall in U.S. home resales, due to skyrocketing home prices caused by lack of inventory. On Thursday, the National Association of Realtors announced a 0.9% decline in existing home sales to an annual rate of 5.33 million units. According to Reuters Polling, economists predicted August would bring sales up 1.1% to 5.45 million units, contrasting July’s 5.39 million, but it seems only the Northeast had a productive month. The unexpected fall is thought to be caused by bad weather in the south disrupting building activity, but there was still a firm rise in single-family dwelling permits!

Compared to one year ago to date, housing inventories have dropped 10.1%! Between July and August, the number of unsold homes on the market fell 3.3% to 2.04 million. At this pace, the entire market’s inventory could be wiped in 4.6 months, compared to last August’s 5.1 months and compared to the universally-viewed “healthy” supply / demand balance of 6.

Although the solidifying job market is starting to raise wages, it is still not enough to keep with high-rising home prices. Home scarcity drove the national median home price up 5.1% to $240,200 last month while the unemployment rate has lingered around 5% since last August. It’s never been a secret: the housing market relies on the job market.

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