by Calculated Risk on 11/20/2013 10:00:00 AM

The NAR reports: October Existing-Home Sales Cool but Low Inventory Drives Prices

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.2 percent to a seasonally adjusted annual rate of 5.12 million in October from 5.29 million in September, but are 6.0 percent higher than the 4.83 million-unit level in October 2012.

Total housing inventory at the end of October declined 1.8 percent to 2.13 million existing homes available for sale, which represents a 5.0-month supply at the current sales pace; the relative supply was 4.9 months in September. Unsold inventory is 0.9 percent above a year ago, when there was a 5.2-month supply.

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in October 2013 (5.12 million SAAR) were 3.2% lower than last month, and were 6.0% above the October 2012 rate.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory was declined to 2.13 million in October from 2.17 million in September.   Inventory is not seasonally adjusted, and inventory usually increases from the seasonal lows in December and January, and peaks in mid-to-late summer.

The third graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory increased 0.9% year-over-year in October compared to October 2012.   The year-over-year change for September was revised down to unchanged, so this is the year-over-year increase in inventory since early 2011 and indicates inventory bottomed earlier this year.

Months of supply was at 5.0 months in October.

This was close to expectations of sales of 5.13 million.  For existing home sales, the key number is inventory - and inventory is still low, but up year-over-year.    I'll have more later ...