Existing Home Sales Drop More than Expected in October

According to Wells Fargo’s Securities Economics Group’s November 20, 2013 Economic Data Press Release, Existing Home Sales Drop More than Expected in October

Existing home sales fell 3.2 percent in October, which is the second consecutive monthly decline. However, all of the weakness was in single-family sales, while condo activity rose 3.3 percent. Inventories remain low.

Too Early To Tell if Government Played a Role:

Existing home sales declined 3.2 percent in October to a 5.1 million unit pace, which was weaker than expected. The decline was concentrated in single-family sales, which fell 4.1percent, the third consecutive monthly decline. Although the government shutdown likely played a role in recent weakness, it is still too early tell. In fact, the cumulative decline over the past three months nearly offset the 6.3 percent jump in July.

Homes Priced at the Low End Show Little Activity:

Listed inventories fell 1.8 percent to 2.1 million homes, which represents a 5.0 month supply. Inventory remains at a historically low level and will continue to constrain sales. Sales for homes priced below $100,000 remain weak on a year-ago basis. This pattern continues to show that much of the activity is coming from the move-up buyer. The most acute drop in this price category was in the West, where sales fell 47.4 percent.

Source: Wells Fargo Economics Group