U.S. existing home sales jumped for the fifth straight month, up 4.3% in October to an annual rate of 6.85 million units. That’s well ahead of the 1.2% drop that analysts had forecast, and put’s home sales up 26.6% over this time last year.
But there’s an issue.
The fast sales pace and low inventory have driven prices to record levels, up 15.5% from this time last year to a record of $313,000, even as unemployment remains near 7%. The high prices could curb the market in the months to come.
There are only so many people leaving urban centers for the suburbs. Eventually, that pipeline will dry up.
At the current sales pace, it would take just 2.5 months to sell all the supply on the market, which is a record-low. A six to seven month supply is considered balanced.