According to the National Association of Realtors, sales of previously owned homes decreased 4.1% in October from September to October at a seasonally adjusted annualized rate of 3.79 million units.
Since August 2010, the sales pace had not been this low. A lesser decline to 3.9 million units was anticipated by analysts. Sales decreased 14.6% from the previous year.
Based on closings from contracts that were probably signed in August and September, the October sales total is calculated. After falling to almost 7% at the end of August, the 30-year fixed mortgage rate started to rise quickly, reaching over 8% by the middle of October. Since then, rates have somewhat decreased.
According to Lawrence Yun, chief economist at NAR, “prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation.” Despite price reductions in the upper end of the market, multiple offers are still happening, particularly on starter and mid-range homes.
1.15 million houses were up for sale at the end of October, a 5.7% decrease from the same time last year. Compared to the number of homes up for sale before COVID, this is approximately half. That’s a 3.6-month supply at the current rate of sales. A market that is balanced between buyers and sellers is one where there is a six-month supply.
Restricted supply prevented prices from rising. October saw a 3.4% increase in the median price of an existing home sold ($378,800) compared to the previous year’s $391,800. Everywhere in the nation saw price increases. For the past four months, there has been a noticeable increase in these yearly price increases. Properties sold for about 28% more than the asking price.
“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 stated, “even though circumstances for buyers remain tight.” “Over the last three years, the average homeowner has amassed more than $100,000 in housing wealth.”
All price ranges saw a decline in sales up to $750,000, but higher-end home sales increased. Over $1 million homes saw an increase of slightly over 9% from the previous year. Either they don’t use mortgages as frequently or they are less sensitive to changes in monthly rates. Yun also pointed out that the higher end of the market has more houses for sale.
October sales were made up of 28% first-time buyers, which is the same as it was a year ago but still much less than the 40% share that they have historically accounted for. 15% of the houses were purchased by individual investors, down from 16% a year ago and 18% in September. Sales made up 29% of all cash transactions, up from 26% in October 2022.
