• Existing home sales beat expectations for the second consecutive month, rising 2 percent to 5.6 million units at a seasonally-adjusted annual rate (SAAR).
• Inventory continued to ease, posting its second consecutive month-over-month gain after contracting for five straight months.
• The median price of existing homes sold touched a new all-time high, though there are sharp divergences in the market for single-family homes and the market for condos/coops.

October existing home sales defied gravity for the second consecutive month, beating expectations for flat to negative growth and instead rising 2 percent from September to 5.6 million units at a seasonally adjusted annual rate (SAAR) according to the National Association of Realtors. Demand for homes, seemingly consistently underrated, remains very strong, and existing home sales are now up 5.9 percent from a year earlier, the strongest pace of annual growth since January.

There was a sharp divergence in October between single-family home sales and condo/coop sales. Sales of single family homes were up 2.25 percent over the month and 6.6 percent over the year, while condo/coop sales were flat compared both to the previous month and the previous year. Over the longer horizon, condo/coop sales have been flat or down somewhat, while single-family home sales have been steadily rising: since summer 2015, existing single-family home sales are up 4.6 percent, while condo/coop sales are down 2.1 percent.

Inventory continued to ease in October, rising 3 percent from September to 1.99 million units (SAAR). After contracting on a monthly basis for the five consecutive months from April to August, inventory has now increased for two consecutive months. The number of existing homes on the market is 4.3 percent below where it was in October 2015, much smaller than the 11.5 percent annual contraction reported in August. On an annual basis, existing home inventory has now been contracting for 17 consecutive months, and has declined in 18 of the past 19 months.

The median, seasonally adjusted price of October existing home sales rose 0.4 percent from September to $236,000, 6 percent higher than a year earlier and the highest median sale price on record. But while the median seasonally adjusted price of existing single-family homes sold is 3.5 percent higher than peak, the median price of existing condo/coops sold remains 4.7 percent below peak[1] (figure 2).

[1] Both price series peaked in October 2005.