The U.S. Census Bureau and the U.S. Department of Housing and Urban Development recently released the October 2017 home sales data — and it’s great news. 685,000 new homes were sold, hitting the highest level the industry has seen in a decade since October 2007.
Lenders, title insurance and real estate agents, builders and other industry professionals should celebrate —and take a closer look at the numbers.
Digging Deeper Into the Data
The number of new home sales from September to October of this year increased 6.2 percent, with an 18.7 percent increase from October of last year (~577,000 homes). The median sales price of homes across the nation equaled approximately $312,800.
In regards to for sale inventory and month’s supply data, the report released a seasonally adjusted estimate of 282,000 new homes for sale at the end of October — which equals to approximately a five month’s supply at the going rate of closed sales.
Breaking It Down
Certainly, we all love to see aggressive home sales data. New homeowners get their dream homes, and industry professionals succeed too. It’s a win-win. While the celebration is appropriate, it is important to think about the numbers in a more comprehensive manner to get the full picture.
Overall, home sales are being limited by a shortage of properties across the U.S. Compared to October of last year the supply is down 10.4 percent. In fact, the housing inventory, on a year-to-year basis, has dropped for 29 consecutive months.
As a result, the average home sales price has shot up with an increase of 5.5 percent over a year ago last year and a run of 68 months of price gains. With these continuing increases, some first-time home buyers have been shut out of the market. For the housing market to be truly robust, many realtors and economists say that the share of first-time home buyers should encompass about 40 percent of the market. So, even though these first-time homebuyers are facing elevated prices with new homes, it’s important to note that existing home sales represent approximately 90 percent of all sales in the U.S.
Another important point is that forecasts for the end of the year are looking good for areas such as Houston and South Florida that were devastated by hurricanes earlier this year. The markets are expected to recover in full according to recent comments from The National Association of Realtors.
Leading Into the Future
Housing industry professionals can take a deep breath with this latest news and continue to plan, strategize, and lead businesses steadily forward into 2018. Make sure to keep an eye on the latest industry news with us here at Bay National Title Company. We are here to bring you important events and information that impact homebuyers and industry professionals alike.
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