Existing home sales rose for the 5th consecutive month, and sales are 26.6% higher compared to a year ago.
As sales rose in October, so did prices. The median home price in October was up by 15.5% compared to a year ago, and we haven’t seen that pace of price growth since 2006. Mortgage rates being at an all time low are certainly affecting prices, but the low supply of inventory and high demand for homes is the largest factor contributing to this price growth.
There is an all time low for inventory available, and we are a long way from a balanced market.
A balanced market is somewhere between 4 to 6 months of inventory, and we are currently averaging around 2 months.
There was an average of almost 3 and a half offers on every transaction that was written last month. There were 7 out of 10 homes that sold within 4 weeks within coming online and the median market time was 21 days, a year ago it was 36 days.
Matthew reinforces his viewpoint that this pace in price growth is absolutely not sustainable. He also believes that while there are very favorable mortgage rates right now, he states that we are rather close to the lowest rates we are going to see in this cycle.
With this type of market Gardner states that something has to happen, and this pace in price growth has to slow down. He believes that we are either going to hit an affordability ceiling or we will see additional supply coming online this next year.