Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased by 1.5% to a seasonally adjusted annual rate of 5.26 million in October. Sales are at their highest annual pace since September 2013 (also 5.26 million) and are now above year-over-year levels (2.5% from last October) for the first time since last October.
Lawrence Yun, NAR chief economist, said the housing market this year has been a tale of two halves. “Buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” Yun said.
Yun added that the job market has also shown continued strength in the past six months. “This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases.” The median existing-home price for all housing types in October was $208,300, which is 5.5% above the same time last year. This marks the 32nd consecutive month of year-over-year price gains.
Total housing inventory at the end of October fell 2.6% to 2.22 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace – the lowest since March. Unsold inventory is now 5.2% higher than a year ago, when there were 2.11 million existing homes available for sale.
“The growth in housing supply this year will likely prevent the drastic sales slowdown and coinciding spike in home prices we saw last winter due to low inventory,” said Yun. “However, more housing starts are needed to increase supply, meet current demand and keep price growth in check.”
All-cash sales made up 27% of all transactions in October, up from 24% in September but down from 31 percent in October of last year. Individual investors, who account for many cash sales, purchased 15 percent of homes in October, up from 14 percent last month but below October 2013 (19 percent).
Sixty-five percent of investors paid cash in October. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage in October dropped to 4%, its lowest level since June 2013 (4.07%), and down from 4.16% in September.
Existing-home sales in October jumped to their highest level in a year, according to the National Association of Realtors (NAR).