Existing-home sales grew 10.1% to a seasonally adjusted annual rate of 6.10 million units in October, the National Association of Realtors (NAR) reports.
October's existing-home sales numbers were up from a downwardly revised pace of 5.54 million in September and are 23.5% above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.
One explanation for October's gain is that borrowers rushed to buy homes in anticipation that the first-time home buyers tax credit would not be extended. NAR's chief economist, Lawrence Yun, says the strong sales numbers might continue in November before declining.
"With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer," he says, adding that there is "still a large pent-up demand that can be tapped before the tax credit expires." Potential buyers seeking to qualify for the credit must have a contract in place by April 30, 2010.
"Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was cancelled or fell through – there likely are many more buyers who were attempting to purchase but simply ran out of time," Yun says.
The national median existing-home price for all housing types was $173,100 in October – down 7.1% from October 2008. Distressed properties, which accounted for 30% of sales during the month, continue to downwardly distort the median price.
Total housing inventory at the end of October fell 3.7% to 3.57 million existing homes available for sale, which represents a seven-month supply at the current sales pace – down from an eight-month supply in September. Unsold inventory totals are 14.9% below this time last year.
SOURCE: National Association of Realtors