October Home Sales Rise Slightly Amid Declining Supply

WASHINGTON, D.C. — Existing home sales saw a modest increase in October, rising 1.2% from September, according to the National Association of Realtors. Sales of previously owned homes reached 4.1 million units on a seasonally adjusted annualized basis, marking a 1.7% increase compared to the same month last year.

This uptick is based on home closings, reflecting contracts likely signed during August and September. Factors such as rising mortgage rates at the beginning of October may impact future closings, especially for homes needing flood insurance or government-backed loans.

The average rate on a 30-year fixed mortgage, which saw fluctuations this fall, started at 6.63% in August, dropped to 6.13% by mid-September, and rebounded to 6.37% by the end of that month.

Meanwhile, the inventory of homes for sale has decreased. Supply fell by 0.7% from September to 1.52 million units, though it remains nearly 11% higher than a year ago. At the current sales pace, there is a 4.4-month supply, which is still considered tight.

The median price for homes sold in October stood at $415,200, reflecting a 2.1% increase from a year earlier and marking the 28th consecutive month of year-over-year price gains. Danielle Hale, chief economist at Realtor.com, noted, “Looking ahead, home shoppers in today’s market face some advantages from falling mortgage rates and seasonally slower competition.” However, she cautioned that housing affordability remains a significant barrier.

Homes are taking longer to sell, averaging 34 days on the market in October compared to 29 days the previous year. First-time buyers made up 32% of total sales, a rise from 27% last year. However, regional disparities exist, with first-time buyers experiencing challenges in the Northeast and West due to supply issues and high prices.

In contrast, the Midwest offered more affordable options, leading to stronger sales. Lawrence Yun, chief economist for the Realtors, explained that “First-time buyers fared better in the Midwest because of the plentiful supply of affordable houses and in the South because there is sufficient inventory.”

Sales growth is notably robust in the luxury segment; homes priced over $1 million saw over a 16% increase in sales from last year, while homes between $750,000 and $1 million experienced a 10% rise. In contrast, sales of homes priced between $100,000 and $250,000 increased by just 1%, and homes below $100,000 saw nearly a 3% decline in sales.