After falling for three straight months, existing-home sales turned the corner and increased 3.4% in October compared with September, reaching a seasonally adjusted annual rate of 3.96 million, according to the National Association of Realtors (NAR).
Year-over-year, existing-home sales were up 2.9%.
Driving the increase in sales was the dip in mortgage rates that came in September.
Not only was it the first month-over-month increase in three months, it was the first year-over-year increase in more than three years.
The median existing-home sales price increased 4.0% compared with October 2023, reaching $407,200.
The inventory of unsold existing homes increased 0.7%. As of the end of the month there were about 1.37 million existing-homes available for sale. That’s about a 4.2-month supply at the current sales pace.
Residential properties typically remained on the market for 29 days in October, up from 28 days in September and 23 days in October 2023.
First-time buyers were responsible for 27% of sales in October, up from 26% in September but down from 28% in October 2023.
Cash sales accounted for 27% of transactions in October, down from 30% in September and 29% in October 2023.
Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in October, up from 16% in September and 15% in October 2023.
Distressed sales – foreclosures and short sales – represented 2% of sales in October, unchanged compared with the previous month and the previous year.
Regionally, and month-over-month, existing-home sales increased 2.2% in the Northeast; 6.7% in the Midwest; 2.9% in the South; and 1.3% in the West.
“The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions,” says Lawrence Yun, chief economist for NAR, in a statement. “Additional job gains and continued economic growth appear assured, resulting in growing housing demand. However, for most first-time homebuyers, mortgage financing is critically important. While mortgage rates remain elevated, they are expected to stabilize.”
In a separate statement, Molly Boesel, principal economist at CoreLogic, says “the housing market is on track for its worst year in more than a decade.”
“The good news is, there’s nowhere to go but up,” Boesel says. “However, stubbornly high mortgage rates and strong home prices will continue to weigh down on the housing recovery. Any potential thaw in the housing market will likely happen only after the pending winter months.”
Photo: Gustavo Zambelli
