Existing-home sales stayed healthy in October, creeping upward 0.8% from September to an annual pace of 6.34 million units, according to the National Association of Realtors (NAR). Sales did dip year over year, falling 5.8% from October 2020, with every region tracked by the NAR seeing a sales decrease.
The monthly increase was fueled entirely by single-family sales, which rose 1.3% to a 5.66-million-unit rate. Sales of condos and co-ops, on the other hand, retreated 2.9% in October, falling to a pace of 680,000 units.
“Home sales remain resilient, despite low inventory and increasing affordability challenges,” said Lawrence Yun, NAR’s chief economist. “Inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”
Inventory continued to dwindle, down 0.8% from September and 12.0% from October last year to fall to 1.25 million units. Unsold inventory now sits at a 2.4-month supply at the current sales pace, unchanged from September and down from 2.5 months year over year.
Meanwhile, home prices remained firmly trending upward, with the median existing-home price in October at $353,900, up 13.1% from last year. October was the 116th straight month of year-over-year price increases, marking the longest streak ever recorded by the NAR.
The recent elevated activity of investors in the residential market has helped exacerbate both the shortage of inventory and the surge in prices, with the NAR reporting that investors and second-home buyers accounted for 17% of October home purchases. Such buyers often come armed with all-cash offers, and subsequently, the share of all-cash purchases jumped from 19% last October to 24% this year. All-cash sales also inched up month over month from 23% in September.
While the impacts of remote work on the market have subsided somewhat since the earlier stages of the pandemic, Yun noted that it continues to push sales in some areas.
“Among some of the workforce, there is an ongoing trend of flexibility to work anywhere, and this has contributed to an increase in sales in some parts of the country,” said Yun. “Record-high stock markets and all-time high home prices have worked to significantly raise total consumer wealth and, when coupled with extended remote work flexibility, elevated housing demand in vacation regions.”