EmailExisting home sales improved to 4.97 mln units in October, up from 4.90 mln in September. The Briefing.com consensus expected existing home sales to fall to 4.85 mln.
The modest boost in sales was in-line with recent mortgage applications activity. The Mortgage Bankers Associations' Mortgage Purchasing Index increased 0.2% in October.
A further expansion in sales in November, however, does not look likely. Not only have the underlying details that normally support the housing market, unemployment and income growth remained soft, but the ability to complete a sale has weakened dramatically in the last month.
That has put substantial pressure on the already tepid pace of demand for existing homes. Contract failures were reported by 33% of realtors in October. That was up from 18% in September and 8% from October 2010. Falling home prices will add to the number of failures over the next several months.
Inventory levels dipped from 8.3 months of supply in September to 8.0 months in October. That was the lowest inventory level since January. Median existing home prices declined 4.7% y/y in October from $170,600 to $162,500.
