Photo: NETAR via Vimeo
Earlier this morning, the National Association of Realtors told us that existing home sales fell 1.5 per cent in September to 4.75 million. This was right in line with expectations.However, median home prices jumped by 11.0 per cent year-over-year.
Here’s what NAR chief economist Lawrence Yun had to say about that: “The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless home builders robustly ramp up production.”
This speaks to a troubling dynamic that’s been developing in the market for new homes.
In recent months, homebuilders have been ramping up the construction of new homes. In a new report from the Census, housing starts surged to a their highest levels since 2008.
The problem is that new home sales haven’t been keeping up pace. Here’s a chart from TD Securities economist Millan Mulraine:
Photo: TD Securities
The September new home sales report will be coming out next Wednesday. This is one report the housing economists will be keeping a very close eye on.