Existing home sales made a surprising comeback in October, rising 3.4% from September levels, and 2.9% year over year, according to the National Association of Realtors (NAR).
Total existing homes sales, which are completed transactions for single-family homes, townhomes, condominiums and co-ops, rose to a seasonally adjusted annual rate of 3.96 million units in October. Sales improved in all four major regions of the country, with year-over-year sales increasing in three regions, while sales were unchanged in the Northeast.
The surprisingly positive numbers come after a disappointing summer, which saw September existing home sales fall 3.5% from August figures, to an annual rate of 3.84 million units. October sales, at an annualized rate of 3.96 million, raised home purchases back near the 4-million-unit sales pace the industry had experienced for much of the year.
NAR Chief Economist Lawrence Yun remained upbeat about the figures, continuing his recent comments that home sales may have turned a corner.
“The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions,” Yun said. “Additional job gains and continued economic growth appear assured, resulting in growing housing demand.”
Total housing inventory at the end of October reached 1.37 million units, up 0.7% from September and 19.1% from a year ago. Unsold inventory sits at a 4.2-month supply at current sales levels, down from 4.3 months in September, but up from 3.6 months in October 2023.
The median existing home price for all housing types in October was $407,200, up 4% from one year ago ($391,600). All four regions of the country saw price gains in October.
Yun said rising prices mean increasing wealth for homeowners nationwide, but he did caution that high interest rates were a problem for first-time homebuyers.
“For most first-time homebuyers, mortgage financing is critically important,” Yun said. “While mortgage rates remain elevated, they are expected to stabilize.”
Regionally, existing home sales in the South climbed 2.9% in October to an annual rate of 1.77 million, up 2.3% from one year ago. Midwest sales jumped by 6.7% to an annualized rate of 950,000, up 1.1% year over year. The Northeast saw sales rise 2.2% for the month, to an annual rate of 470,000, the same as October 2023. In the West, sales rose 1.3% to an annual rate of 770,000, up 8.5% from a year earlier.
Despite the upbeat report, Molly Boesel, principal economist at CoreLogic, points out that the housing market is still on track for its worst year in more than a decade, thanks to high interest rates on 30-year fixed mortgages that are once-again toying with the 7% level. And she doesn’t see things getting better until next year.
“The good news is, there’s nowhere to go but up. However, stubbornly high mortgage rates and strong home prices will continue to weigh down on the housing recovery,” Boesel said. “Any potential thaw in the housing market will likely happen only after the pending winter months.”
