US Existing Home Sales Jump To Highest Since 2006 As Million-Dollar-Plus Sales Explode

While the rebound in existing home sales is expected to slow (from the massive beat: +24.7% MoM surge in July), analysts still expected SAAR to extend its gains to the highest since 2006... and it did.

As expected, Existing Home Sales rose 2.4% MoM in August to 6.00mm SAAR - the highest since Dec 2006

Source: Bloomberg

"Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market," said Lawrence Yun, NAR’s chief economist.

"Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery."

This is the highest YoY jump since Nov 2016...

Source: Bloomberg

Sales were very focused on the extreme high-end with a 44% increase in $1MM homes sold YoY...

Regional Breakdown:

  • Existing-home sales in the Northeast jumped 13.8%, recording an annual rate of 740,000, a 5.7% increase from a year ago. The median price in the Northeast was $349,500, up 10.4% from August 2019.

  • Existing-home sales increased 1.4% in the Midwest to an annual rate of 1,410,000 in August, up 9.3% from a year ago. The median price in the Midwest was $246,300, a 10.7% increase from August 2019.

  • Existing-home sales in the South rose 0.8% to an annual rate of 2.60 million in August, up 13.0% from the same time one year ago. The median price in the South was $269,200, a 12.3% increase from a year ago.

  • Existing-home sales in the West inched up 0.8% to an annual rate of 1,250,000 in August, a 9.6% increase from a year ago. The median price in the West was $456,100, up 11.8% from August 2019.

As Freddie Mac chief economist noted,

"Despite the recession, low rates have spurred first-time homebuyer activity, up 19% in August from July. This rebound in the housing market comes at a critical time for the economy."

Yun reiterated a similar message on a call with reporters, noting that if Congress fails to pass an additional virus-relief package, “it doesn’t help” but the housing market “will remain strong” because of near record-low rates,

“I do expect a further increase in sales for the remainder end of the year. There’s plenty of buyers in the pipeline.”

Multi-family/Rental units dominated the sales...

  • Single-family home sales sat at a seasonally-adjusted annual rate of 5.37 million in August, up 1.7% from 5.28 million in July, and up 11.0% from one year ago. The median existing single-family home price was $315,000 in August, up 11.7% from August 2019.

  • Condominium and co-op sales were recorded at a seasonally adjusted annual rate of 630,000 units in August, up 8.6% from July and up 6.8% from one year ago. The median existing condo price was $273,300 in August, an increase of 7.8% from a year ago.

Finally, Yun notes that "over recent months, we have seen lumber prices surge dramatically... This has already led to an increase in the cost of multifamily housing and an even higher increase for single-family homes."

Sending median home prices to record high at $310,000...

Quite a jump from the 2007 bubble peak of $230,000!