The National Association of Realtors® (NAR) has released data showing that existing-home sales have gone up for the first time after six months. Sales activity saw gains in three out of four regions across the country.
Improved Sales in October
Existing-home sales refer to completed transactions, which include single-family homes, condominiums, townhomes, and co-ops.
This group witnessed a jump of 1.4 percent in October over the previous month to seasonally adjusted rate of 5.22 million. However, compared to the same month last year, the sales are lower by 5.1 percent.
More Buyers Entering the Market
According to NAR’s chief economist Lawrence Yun, the increase in housing inventory has led to more buyers stepping back into the market.
Sales in the Northeast, South and West saw considerable gains, which is a reversal from the declines seen in September. This has helped improve the general sales activity for the first time since March 2018.
Housing Inventory Reduces Despite Rising Prices
In October, the median existing-home price was $255,400 for all housing types. This represents a hike of 3.8 percent from the same time last year. In fact, the price increase in October marks the 80th consecutive month of year-over-year gains.
Housing inventory in October reduced to 1.85 million (from 1.88 million in September). However, compared to the same time last year, the inventory was higher. Unsold inventory in October stood at a 4.3-month supply, declining from 4.4 in September.
In October, 46 percent of the homes sold were on the market for less than a month. According to Yun, as more inventories come into the market in the approach winter season, home price growth is beginning to slow down, allowing for more manageable buying conditions.
The Market Hotness Index from Realtor.com® showed that the hottest metro areas in October were Midland, Texas; Fort Wayne, Ind.; Odessa, Texas; Boston-Cambridge-Newton, Mass.; and Columbus, Ohio.
Higher Interest Rate Challenges Continue
NAR President John Smaby welcomed the month over month gains in October, but said that sales are still down from a year ago. A key reason for this situation is the higher interest rates which affect affordability.
Smaby suggested that would-be buyers seeking their dream home should contact a Realtor® as a first step in the buying process to help them navigate this more challenging market environment.