Lack of Supply Drives Home Prices up and Encourages Building

Existing Home Sales  (October 2012)

 

Existing Home Sales – (Seasonally Adjusted, annualized rate)  4,790,000. Previous was 4,750,000
Existing Home Sales – Month/Month (unadjusted) +2.1%
Existing Home Sales – Year/Year  +10.9%

 

There might be more sales if there were more supply but the fact that so many folks owe more than their home is worth makes selling impractical. This unusual circumstance of so many homes being underwater will have the effect of increasing prices on the homes which do come to market and will encourage building to accommodate demand.

 

Housing Market Index (November 2012)

 

Index value is 46.  Previous was 41. This index from The National Association of Home Builders is a survey index of home builders.  As mentioned above the limited supply of Existing Homes should encourage building but will set a limit on potential prices increases as those increases drive more currently underwater existing homes to market.