Home Sales & House Prices Continue Strength

Posted by jbrumley on October 22, 2015 6:40 PM

Rising Home Prices and Existing Home Sales Confirm Strength of Real Estate Market

On Tuesday of this week we learned that September's housing starts and the number of building permits issued, though not red hot, pointed to a continued growth trend favoring homebuilders like PulteGroup (PHM) and Hovnanian (HOV). That strength was underscored today by numbers that, although not directly related to homebuilding (XHB), suggest the entire real estate tide continues to rise, lifting homebuilder stocks with it.

For August, the FHFA Housing Price Index advanced 0.3% on a month-to-month basis, and was up 5.5% on a year-over-year basis. The FHFA Housing Price Index is now well into its fourth year of impressive and consistent forward progress.

Also released on Thursday was September's tally of existing home sales. The National Association of Realtors reported that existing homes sold at an annualized pace of 5.55 million, which is the second-highest reading since 2007 when sales were falling rapidly. Though not quite as even and consistent as the rise in home prices, the existing home sales data also extends a multi-year growth trend.

The NAR also noted that the current inventory of homes for sale was on the light side, at 2.21 million units. This lack of supply helps support the home-price uptrend, but in some regards may have held existing-home sales back -- homebuyers may not have found enough selection to choose from.

Home Sales & House Prices Chart
102215-home-sales-prices-inventory

BECOME A BIG TRENDS INSIDER! IT’S FREE!