U.S. existing home sales rise sequentially in September

Existing home sales in the U.S. rose sequentially in September by 0.7 percent to 5.39 million, as compared to the consensus expectations of a slight moderation of 5.30 million. The rebound was mainly due to sales of single-family units that rose 1.1 percent sequentially, following three straight months of negative growth.

Sales of existing multi-family homes dropped 1.6 percent sequentially. Most of the rebound in sales seems to have come from the West and Midwest, while sales dropped in the South and were flat in the Northeast. Existing home sale inventory rose higher to 1.80 million units on a seasonally adjusted basis, but continues to be at historically low levels. Months’ supply of homes remained stable at 4.2 million units. The scarcity of inventory is one of the factors that is expected to put a downward pressure on sales in the near future, noted Barclays in a research report.

The other details in the report show that the median price of existing homes declined; the share of distressed transactions was the same at 4 percent, still a rebound from the 7 percent level recorded at the start of the year. Slightly less than one-third of all buyers of existing homes were first-time buyers, and around one-fifth of all purchases were conducted in cash. The stronger-than expected data suggest slightly higher broker commissions that had been pencilled in.

“As a result, our Q3 GDP tracker is unchanged at 2.3 percent, after rounding”, added Barclays.

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