Existing-home sales increased by just 0.8 percent in October to a seasonally adjusted annual rate of 6.34 million but the resiliency should push sales beyond 6 million homes, the highest volume since 2006, according to the National Association of Realtor’s (NAR) existing-home sales report released on Monday.
The monthly gain was modest, but still marked the second consecutive month in which the housing metric grew. Compared to the previous year, existing-home sales declined by 5.8 percent.
“Home sales remain resilient, despite low inventory and increasing affordability challenges,” NAR Chief Economist Lawrence Yun said in a statement. “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 across all housing types at the end of October was down 0.8 percent from the month previous and down 12 percent year over year to 1.25 million units. That amount of inventory represented 2.4 months of supply, the same as it was in September, but down from 2.5 months one year ago. Nonetheless, new- and existing-home sales are expected to exceed 6 million by the end of the year, according to Fannie Mae.
Home prices continued to climb, with the median existing-home price up 13.1 percent from $313,000 in October 2020 to $353,900 in October 2021. This most recent month of sustained growth marked the 116th straight month of year over year increases in home prices, a new record.
Yun noted that the ability of many consumers to now work from home has allowed home prices to skyrocket in destination markets where the wealthy have migrated.
“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.”
Homes stayed on the market for one day more in October than in September, increasing to 18 days on market, but down from 21 days in October 2020. About 80 percent of homes sold during October stayed on the market for less than a month.
First-time homebuyers made up 29 percent of sales in October, up from 28 percent the previous month and down from 32 percent the year before.
Individual investors, meanwhile, made up 17 percent of home sales in October, up from 13 percent in September and up from 14 percent in October 2020. Nearly one-quarter of all transactions during October were all-cash sales, up from 23 percent in September and from 19 percent the year before.
Distressed sales made up less than 1 percent of sales, the same percentage as the previous month, as well as in October 2020.
The average commitment rate on a 30-year conventional fixed-rate mortgage made gains in October, increasing from 2.90 percent the month before to 3.07 percent.
Single-family home sales were up 1.3 percent from 5.50 million in September to 5.66 million in October, but down 5.8 percent from the year before. Meanwhile, the median existing single-family home price surged 13.5 percent year over year to $360,800.
Existing condo and co-op sales were down 2.9 percent from September to a seasonally adjusted annual rate of 680,000 units. Those sales were also down 5.6 percent year over year. The median existing condo price increased 8.7 percent year over year to $296,700.
The Midwest saw the greatest increase in existing-home sales, with sales rising 4.2 percent from September to an annual rate of 1,500,000, but down 6.3 percent year over year. The Midwest median price rose 7.8 percent from October 2020 to $259,800.
In the South, existing-home sales inched up 0.4 percent to an annual rate of 2,780,000, down 3.5 percent from the year before. The region’s median price was $315,500, up 16.1 percent year over year.
The West’s existing-home sales remained steady from the previous month at an annual rate of 1,310,000 in October, down 5.1 percent from October 2020. The median price in the area was $507,200, up 7.7 percent from the year before.
The Northeast was the only region that saw a decline in existing-home sales, with sales dropping 2.6 percent from the previous month to an annual rate of 750,000, down 13.8 percent from October 2020. The region’s median price was up 6.4 percent year over year to $379,100.