High mortgage rates, high selling prices, and limited inventory saw US existing home sales at the slowest pace of sales since August 2010. The National Association of Realtors said the sales decreased 4.1% month-over-month in October to a seasonally adjusted annual rate of 3.79 million (consensus 3.90 million) from a downwardly revised 3.95 million (from 3.96 million) in September. Sales were down 14.6% from the same period a year ago.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.44% as of November 16. That’s down from 7.50% the previous week but up from 6.61% one year ago.
Data for October 2023
Highlights
- US existing home sales for October 3.79M annualized versus 3.90M estimate
- Prior month 3.96 million annualize rate revised to 3.95M
- Existing home sales -4.1% versus -2.2% last month
- Inventory 1.15M which is 3.6 months up from 3.4 months last month
- Sales are down -14.6% from a year ago
- Properties typically remained on the market for 23 days in October, up from 21 days in September 2023 and October 2022.
- 66% of homes sold in October were on the market for less than a month.
- First-time buyers were responsible for 28% of sales in October, up from 27% in September and identical to October 2022. NAR’s 2023 Profile of Home Buyers and Sellers found that the annual share of first-time buyers was 32%.
- All-cash sales accounted for 29% of transactions in October, unchanged from September but up from 26% in October 2022.
- Individual investors or second-home buyers, who make up many cash sales, purchased 15% of homes in October, down from 18% in September and 16% one year ago.
- Distressed sales – foreclosures and short sales – represented 2% of sales in October, virtually unchanged from last month and the previous year.
“Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest,” Yun added. “Though limited now, expect housing inventory to improve after this winter and heading into the spring. More inventory will result in more home sales.”
“While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October,” Yun said. “In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years.”
Single-family and Condo/Co-op Sales
Single-family home sales declined to a seasonally adjusted annual rate of 3.38 million in October, down 4.2% from 3.53 million in September and 14.6% from the previous year. The median existing single-family home price was $396,100 in October, up 3.0% from October 2022.
Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 410,000 units in October, down 2.4% from September and 14.6% from one year ago. The median existing condo price was $356,000 in October, up 7.6% from the prior year ($331,000).
Regional Breakdown
Existing home sales across regions:
- West -1.4% from September to an annual rate of 690,000. Down 14.8% from a year ago.
- South -7.1% from September to an annual rate of 1.69 million. Down 14.6% from a year ago.
- Northeast -4.0% from September to an annual rate of 480,000. Down 15.8% from a year ago.
- Midwest unchanged from September. Down 13.9% from year ago.
Median home prices by region year-over-year:
- West prices are up 2.3% from a year ago
- South prices are up 4.2% from year ago
- Northeast prices are up 7.5% on the year
- Midwest prices are up 4.2% from a year ago
The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
Existing home sales account for 90% of US transactions and are calculated on a contract close basis. New home sales account for the remaining 10% and are based on contract signings.
Existing-home sales include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.
Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.
Source: NAHB
From The TradersCommunity News Desk