ARLINGTON, Va.—Despite a 2% increase in October, existing home sales were still down year over year.
NAFCU Research Assistant Yun Cohen said in a NAFCU Macro Data Flash report Tuesday that despite demand, "the lack of affordable inventory continues to constrain sales."
October's existing home sales were 0.9% lower than a year ago, according to data released by the National Association of Realtors.
"The inventory constraint is expected to persist into 2018," Cohen said. "Recently proposed changes to capital gains taxes would disincentivize some home sales and also poses downside risk to housing supply."
Based on current sales, there were 3.9 months of supply at the end of October, down from 4.2 months in September; analysts consider six months of supply to be roughly balanced between supply and demand, NAFCU said.
Inventory decreased 3.2% in October and was down 10.4 percent from a year ago. Inventory has declined year-over-year for 29 consecutive months. The median existing home price decreased from $247,600 in September to $247,000 (not seasonally adjusted) in October. This is 5.5% higher than the median price from a year ago. October marks the 68th consecutive month of year-over-year price increases, NAFCU said.