With the US dollar rallying, gold and silver tumbling, look at what is happening with the real estate market.
October 22 (King World News) – Peter Boockvar: Existing home sales in September, likely reflecting most contract signings in the June thru August time frame, totaled 6.54mm, above the estimate of 6.3mm and up from 5.98mm in August.
That is the most since May 2006 with a rise m/o/m in all 4 regions. With the decline in the number of homes for sale, months’ supply fell to just 2.7 from 3.0, the lowest in data going back to 1999.
The median home price was up 14.8% to a new record with the average price higher by 11.6%.
These double digit gains are obviously sharp but also is due in part to the mix as more higher priced homes are sold relative to the cheaper ones. The number of homes priced above $500k are up sharply y/o/y, with those above $1mm in particular up 107% y/o/y. Either way, price gains are inflecting sharply higher across all price points. To this, maybe it’s already impacting the first time buyer which made up just 31% of purchases vs 33% in August, 34% in July, 35% in June and 33% in September 2019.
Yes, lower mortgage rates help but higher home prices also mean higher down payments, even for those coming up with just 3.5%. All cash buyers held at 18% of purchases as some of these are buyers of vacation homes. The NAR said “sales in vacation destinations counties have seen a strong acceleration since July, with a 34% y/o/y gain in September.” This includes regions such as Lake Tahoe, Rehoboth Beach and Myrtle Beach according to the NAR…
ALERT:
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Bottom line, we know housing has been a source of strength in this economy for a variety of reasons. Price though matters, and we’ll see if the decline in the presence of 1st time buyers is the 1st sign of that. With aggressive price increases, low mortgage rates stop being a benefit. It is why we need more new home supply to both add to inventory and slow these sharp price increases, especially for the buyer of homes priced under $300k.
This Is How Bad It Has Gotten For Main Street America
***ALSO JUST RELEASED: Celente – This Is How Bad It Has Gotten For Main Street America CLICK HERE.
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