Image: MH / Adobestock
Existing-home sales declined in October across the country, according to the National Association of Realtors (NAR), with all four sales regions experiencing year-over-year declines. Month-over-month sales were unchanged in the Midwest but fell in the Northeast, South, and West. Fueling the sales declines were a lack of housing inventory and high mortgage rates, according to Lawrence Yun, chief economist for NAR. “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.”
Rising Prices and Home Sellers’ Gains
Although home sales were down in October, existing-home prices continued to climb, increasing 3.4% year over year to reach a new all-time high. Every sales region in the country posted price gains. Homeowners have done particularly well in the housing market as of late, according to Yun. “In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years.”
Market Dynamics: Days on Market and Buyer Trends
According to the REALTORS Confidence Index, the average property remained on the market for 23 days in October, up from 21 days both a month and a year ago. Of all the homes sold in October, 66% were available for under 30 days. First-time buyers remained undaunted by the challenging market conditions, as this group accounted for 28% of all sales, a slight increase from September and unchanged from October 2022. Ongoing demand continued from all-cash buyers as well, with this group representing 29% of all October transactions.
Mortgage Rates, Inventory, and Future Outlook
The 30-year fixed-rate mortgage averaged 7.44% as of November 16, according to Freddie Mac. This was the third consecutive week of rate declines, which served to fuel buyer interest. These buyers, however, still face persistent housing shortages. At the end of October, the housing inventory was 1.15 million units, an increase of 1.8% from a month ago but a decrease of 5.7% from a year ago. At the current sales pace, unsold inventory would supply the market for 3.6 months, up from a 3.4-month supply in September and a 3.3-month supply in October 2022. “Though limited now, expect housing inventory to improve after this winter and heading into the spring,” said Yun. Economists expect the increase in inventory to boost home sales in the coming year.
Regional Sales Breakdown
Northeast: Existing-home sales annual rate of 480,000; a decrease of 4% from September 2023 and 15.8% from October 2022. The median sales price of $439,200 represented an increase of 7.5% from October 2022.
Midwest: Existing-home sales annual rate of 930,000; unchanged from September 2023 but a decrease of 13.9% from October 2022. The median sales price of $285,100 represented an increase of 4.2% from October 2022.
South: Existing-home sales annual rate of 1.69 million; a decrease of 7.1% from September 2023 and 14.6% from October 2022. The median sales price of $357,700 represented an increase of 3.5% from October 2022.
West: Existing-home sales annual rate of 690,000; a decrease of 1.4% from September 2023 and 14.8% from October 2022. The median sales price of $602,200 represented an increase of 2.3% from October 2022.
