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NAR: Existing-Home Sales Climb 1.9% in October

“We will likely continue to see sales climb as long as potential buyers are presented with an adequate supply of inventory,” says NAR Chief Economist Lawrence Yun.  

WASHINGTON – Existing-home sales rose in October – a slight recovery from the declines seen in September, according to the National Association of Realtors® (NAR). The four major U.S. regions were split last month: The Midwest and South saw growth, and the Northeast and the West reported a drop in sales.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – increased 1.9% from September to a seasonally-adjusted annual rate of 5.46 million in October. Despite lingering regional variances, overall sales are up 4.6% year-to-year (5.22 million in October 2018).

Lawrence Yun, NAR’s chief economist, said this sales increase is encouraging and he expects added growth in the coming months.

“Historically-low interest rates, continuing job expansion, higher weekly earnings and low mortgage rates are undoubtedly contributing to these higher numbers,” says Yun. “We will likely continue to see sales climb as long as potential buyers are presented with an adequate supply of inventory.”

The median existing-home price for all housing types in October was $270,900, up 6.2% from October 2018 ($255,100). Prices rose in all regions. October’s price increase marks 92 straight months of year-over-year gains.

Total housing inventory at the end of October sat at 1.77 million units, down approximately 2.7% from September and 4.3% from one year ago (1.85 million). Unsold inventory sits at a 3.9-month supply at the current sales pace, down from 4.1 months in September and from the 4.3-month figure recorded in October 2018.

“The issuance of more housing permits is a very positive sign and a good step toward more inventory,” says Yun, citing the latest data for housing starts. “In order to better counter and even slow the increase in housing prices, home builders will have to bring additional homes on the market.”

Properties typically remained on the market for 36 days in October, up from 32 days in September and consistent with October 2018 numbers; 46% of homes sold in October 2019 were on the market for less than a month.

First-time buyers made up 31% of October sales, down from 33% in September and identical to the 31% recorded in October 2018.

Individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in October 2019. That’s unchanged from September but down from the 15% figure recorded in October 2018. All-cash sales accounted for 19% of transactions in October, up from 17% in August but down from 23% in October 2018.

Distressed sales – foreclosures and short sales – represented 2% of sales in October, unchanged from September but down from 3% in October 2018.

“It is great to see home sales rise along with an increase in housing permits,” says NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “Both homebuyers and home sellers are being rewarded by these developments, and we see that conditions remain extremely favorable for real estate investment in America.”

Mortgage rates have been trending downward since July through September, but they slightly rose in October. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 3.69% in October, up from 3.61% in September. The average commitment rate across all of 2018 was 4.54%.

Single-family and condo/co-op sales

Single-family home sales sat at a seasonally-adjusted annual rate of 4.87 million in October, down from 4.77 million in September but up 5.4% from a year ago. The median existing single-family home price was $273,600 in October 2019, up 6.2% from October 2018.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 590,000 units in October, about even with the previous month and 1.7% lower than a year ago. The median existing condo price was $248,500 in October, which is an increase of 5.6% from a year ago.

Regional breakdown

Compared to last month, October sales increased in the Midwest and South regions, but sales are up in all regions from a year ago. Median home prices in all regions increased from one year ago, with the West region showing the strongest price gain.

October 2019 existing-home sales in the Northeast fell 1.4% to an annual rate of 690,000, with no change from a year ago. The median price in the Northeast was $296,700, up 5.7% from October 2018.

In the Midwest, existing-home sales increased 1.6% to an annual rate of 1.29 million, up 2.4% from a year ago. The median price in the Midwest was $209,900, a 6.7% jump from a year ago.

Existing-home sales in the South increased 4.4% to an annual rate of 2.35 million in October, up 7.8% from a year ago. The median price in the South was $234,900, a 6.0% increase from this time last year.

Existing-home sales in the West declined 0.9% to an annual rate of 1.13 million in October, 3.7% above a year ago. The median price in the West was $410,700, up 7.8% from October 2018.

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