U.S. Existing Home Sales Reveal Surprise in First-Time Buyer Data
This past week's existing home sales data show an increase of 5 percent to 5.55 million in September 2015, reversing the decline in August when the existing home market lost some momentum as a result of stock market declines. The September results were at the high end of analyst expectations and thus reflect the continuing positive growth in demand for homes.
According to Realtor.com Chief Economist Jonathan Smoke, "The biggest surprise in the data was that the first-time buyer share fell to 29 percent from 32 percent in August. But despite that decline, we estimate from the monthly sales data this year that first-time buyers have been responsible for 45 percent of the growth in sales over last year. The September share decline may simply reflect more competition in September by repeat buyers whose closings slipped in August due to the stock market disruptions.
Smoke further commented, "Existing home sales are impacted by major stock market declines, since at least one in five buyers funds a portion or all of their purchase with stock or retirement accounts. But barring stock corrections that reflect real economic downturns -- which we are not experiencing -- home sales typically return to the prior trend after stock values stabilize.
"Tight supply is an impediment to future growth, and we are not seeing new construction grew enough to fill the void. As a result, we should expect to see tight supply remain a factor for the months and year ahead", concluded Smoke.