Between August and September, market potential increased by an estimated 16,000 sales at a seasonally adjusted, annualized rate.
In September, potential existing-home sales increased 0.3% month over month to a 5.84 million seasonally adjusted, annualized rate. The latest increase is 94.4% higher than the low point of market potential recorded in December 2008. On a year-over-year basis, market potential for existing-home sales fell by 5%, representing a loss of 307,000 sales at a seasonally adjusted, annualized rate.
First American said that potential existing-home sales are currently at a 521,000 seasonally adjusted, annualized rate, or 8.9% below the pre-recession peak of market potential, which was recorded in July 2005.
“Existing-home sales as reported by the National Association of Realtors remain below potential due to supply constraints caused by existing homeowners' reluctance to list their homes for sale for fear of not being able to find a home to buy,” First American Chief Economist Mark Fleming said. “Additionally, Hurricanes Irma and Harvey may negatively impact actual existing-home sales regionally, but only temporarily. Based on data from previous natural disasters, home buying usually rebounds as households recover from the disruption of natural disasters.”
Short-term drop in existing-home sales expected in hurricanes’ aftermath
Existing-home sales market is underperforming potential
The market for existing-home sales underperformed its potential by 7.8%, representing estimated sales of 453,000 at a seasonally adjusted, annualized rate, according to the Potential Home Sales model for September released by First American Financial.