Housing Market Update for December 2019
With 2019 coming to a close, it’s time to take a look at early fourth-quarter numbers and see what they might tell us about the new year ahead.
Price and sales
According to the National Association of REALTORS®, existing-home sales rose by 1.9% in October while the median price for a single-family home saw a 6.2% increase year-over-year. Year-over-year sales were up in all four major regions with sales strongest in the South. Median home prices also saw an increase over 2018 in all four regions with the West showing the greatest gain in home prices.
From a regional perspective, sales declined in the Northeast by 1.4% to an annual rate of 690,000 with no change from a year ago. The Midwest saw an increase of 1.6% to an annual rate of 1.29 million, up 2.4% year-over-year, while the West saw sales decline by 0.9% to an annual rate of 1.13 million in October, 3.7% above 2018. The South increased sales by 4.4% to an annual rate of 2.35 million in October, up 7.8% compared with last year.
More important numbers
- 1.9% – the increase in sales for all housing types from September to a seasonally adjusted rate of 5.46 million in October, up 4.6% year-over-year or 5.22 million
- 92 – the number of months in which the median price of all existing housing types have increased
- $273,600 – the median price for an existing single-family home in October, up by 6.2% year-over-year
- 4.87 – the percentage for a seasonally adjusted annual rate of sales of single-family homes in October down from 4.7% in September but up 5.4% year-over-year
- $248,500 – the median price for existing condos in October and roughly even with September but down by 1.7% year-over-year
- 36 – the number of days it took for homes to sell in October, up from 32 in September but the same year-over-year
- 3.9 – the number of months it would take to sell current housing inventory at the current rate of sale in October, down from 4.1 months in September and down from 4.3 year-over-year
- 6.9 – the percentage of total housing inventory as of the end of October down up 4.1% in September, a 2.6% decrease and a decline of 98,000 homes compared with October 2018
- 31 – the percentage of sales in October for first-time homebuyers down from 33% in September and 31% year-over-year
- 33% – the percentage of sales to first-time homebuyers
- 19 – the percentage of cash purchases in October, down from 23% year-over-year
- 2 – the percentage of sales in October that were distressed sales remain the same as September, but are down by 3% year-over-year
- 14 – the percentage of purchases made with cash in October, the same as in September but down by 15% year-over-year
The bottom line
Fears of a possible 2020 recession have abated for the moment. While the overall economy remains strong, there are signs that a downturn may be in the offing. The rate of inflation rose to 1.8% in October compared with 1.7% year-over-year. The number of new jobs continues to increase with unemployment remaining low. However, investments by businesses and U.S. exports show signs of weakening. U.S. GDP is currently 1.9% compared to 2.0% for the quarter ending in July. Household spending is still on the rise. And, while the stock market continues to see gains, volatility remains as a result of ongoing on-and-off trade discussions with China and a market correction analysts are expecting.
Historically low interest rates and robust job expansion continue to drive the housing market while inventory remains in short supply. New construction and more affordable housing are desperately needed. Aside from inventory concerns, trade disputes, an ongoing impeachment of the President, and the 2020 elections, all stand to impact markets. Stay tuned.