Inflation's impact on real estate amid strong existing home sales data

Chris Senyek Wolfe Research chief investment strategist joins 'Power Lunch' to discuss today's hot housing market and inflation's role in the boom For access to live and exclusive video from CNBC subscribe to CNBC PRO a https 3A 2F 2Fcnb cx 2F2NGeIvi a Sales of previously owned homes in October rose 0 8 to a seasonally adjusted annualized rate of 6 34 million units according to the National Association of Realtors Sales were 5 8 lower than October 2020 October of last year was the cyclical high in the market This measure represents closed sales for existing single-family homes and condominiums in October so contracts that were likely signed in August and September The closing process can take one to two months on average Realtors are now predicting full-year sales of over 6 million which would be the highest number of sales since 2006 Sales remain very strong and I would attribute that to continuing job additions said Lawrence Yun chief economist for the Realtors Yun also pointed to an increase in investors in the market likely driven by soaring rents for single-family homes Investors made up 17 of October buyers up from 13 in September and 14 in October of 2020 All cash buyers represented 24 of buyers Most investors use all cash First-time buyers represented 29 of sales compared with 32 a year ago Historically that share is around 40 The supply of existing homes for sale continued to weaken There were 1 25 million homes available for sale at the end of October which is 12 lower compared with a year ago This represents a 2 4-month supply at the current sales pace A 5 to 6-month supply is considered a balanced market between buyer and seller Weak supply and strong demand pushed the median price of an existing home to 353 900 That is 13 1 higher compared with October 2020 By price category sales of homes priced under 250 000 fell 24 year over year Sales of homes priced between 750 000 and 1 million rose 25 Sales of million-dollar plus homes were up 31 Buyers in October did not get a break from mortgage rates They rose steadily from the start of August through September The average rate on the popular 30-year fixed loan was 2 78 on August 3rd according to Mortgage News Daily By October 29th it was 3 22 The rate as of last Friday was 3 16 The latest read on sales of newly built homes from September showed a 14 jump from August Builders continue to see strong demand due to the low supply of existing homes for sale Some of the largest national builders however have said they are slowing sales due to supply chain and labor issues They are concerned they might not be able to deliver the homes on time Subscribe to CNBC TV a https 3A 2F 2Fcnb cx 2FSubscribeCNBCtelevision a Subscribe to CNBC a https 3A 2F 2Fcnb cx 2FSubscribeCNBC a Subscribe to CNBC Classic a https 3A 2F 2Fcnb cx 2FSubscribeCNBC a classic Turn to CNBC TV for the latest stock market news and analysis From market futures to live price updates CNBC is the leader in business news worldwide The News with Shepard Smith is CNBC s daily news podcast providing deep non-partisan coverage and perspective on the day s most important stories Available to listen by 8 30pm ET 5 30pm PT daily beginning September 30 a https 3A 2F 2Fwww cnbc com 2F2020 2F09 2F29 2Fthe-news-with-shepard-smith-podcast html 3F source 3Dyoutube 257Cshepsmith 257Cpodcast a Connect with CNBC News Online Get the latest news a http 3A 2F 2Fwww cnbc com 2F a Follow CNBC on LinkedIn a https 3A 2F 2Fcnb cx 2FLinkedInCNBC a Follow CNBC News on Facebook a https 3A 2F 2Fcnb cx 2FLikeCNBC a Follow CNBC News on Twitter a https 3A 2F 2Fcnb cx 2FFollowCNBC a Follow CNBC News on Instagram a https 3A 2F 2Fcnb cx 2FInstagramCNBC a a https 3A 2F 2Fwww cnbc com 2Fselect 2Fbest-credit-cards 2F a CNBC CNBCTV

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