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On October 19, the National Association of Realtors released existing-home sales numbers for September. August sales were revised up to an annual rate of 4.83 million, meaning September’s annual rate of 4.75 million reflects a decrease of 1.7 percent. September 2012 sales are 11 percent higher than the pace for September 2011.
“Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery,” said NAR chief economist Lawrence Yun in the release. “More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West.”
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At the current sales pace, housing inventory will last 5.9 months. “The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless home builders robustly ramp up production,” said Yun. The median price for existing single-family homes rose 11.4 percent from last September to $184,300.
The idea that home builders will ramp up production is not unfounded. The National Association of Home Builders released confidence numbers on October 16 that are the highest since June 2006, with the highest numbers in the West.
The Federal Reserve’s latest round of quantitative easing — in which it gobbles up $40 billion in mortgage-backed securities per month — has helped drive 30-year mortgage rates to historic lows.
A slew of home building stocks cracked 52-week highs on the news, Lowe’s (NYSE:LOW) among them. Home Depot (NYSE:HD) is trading about two dollars shy of a 52-week high. The company is soldiering on with shares gaining over 47 percent value this year to date. PulteGroup (NYSE:PHM), with earnings coming at the end of the month, is expected to post solid gains after showing over 170 percent growth in share value this year to date.
Online real estate information exchange Zillow (NASDAQ:Z), promising to change the way the realty industry does business, could stand to benefit as home sales strengthen. The stock has had a bumpy ride, but is trending up at 56 percent growth this year to date.
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