The long-standing slide for existing home sales continued in October, with transactions dropping to a seasonally adjusted annual rate of 3.79 million, the slowest pace in more than 13 years.
That’s according to the newest data from the National Association of Realtors (NAR), which revealed that resales fell 4.1% from the prior month and 14.6% from October 2022. The pace fell far short of expectations, with economists surveyed by Reuters predicting a rate of 3.90 million units.
It’s also the slowest pace since August 2010, when sales dipped after the expiry of a federal tax credit for homebuyers. In fact, since the turn of the millennium, only three months have had slower sales rates than October. The recent low was 3.45 million units, in the thick of the housing doldrums following the global financial crisis of the late 2000s.
Unless the housing market heats up in a big and uncharacteristic way to close the year, 2023 is set to be the worst year for existing home sales since 1992.
“Prospective homebuyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation,” NAR chief economist Lawrence Yun said. “Multiple offers, however, are still occurring, especially on starter and midpriced homes, even as price concessions are happening in the upper end of the market.”
Low inventory, along with historically high interest rates, continues to be a persistent bogeyman for the market. Total housing inventory at the end of October was 1.15 million units, up 1.8% from September but down 5.7% from October 2022. The slow pace of sales is helping to restock supply somewhat, with unsold inventory now at a 3.6-month supply at the current sales pace. That’s up from 3.4 months in September and up from 3.3 months in October 2022, although inventory remains at precariously low levels.
The lack of supply has also helped home prices swell despite the glacial pace of sales. The median price for all types of existing homes was $391,800 in October, up 3.4% year over year.
“While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year over year, including a new all-time high for the month of October,” Yun said. “In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years.”