October Existing Home Sales Up First Time in 6 Months

Mike Sorohan msorohan@mba.org

November 26, 2018

(Editor's Note: The MBA Advocacy Update, which normally appears in this slot, will return on Monday, Dec. 3.)

Existing home sales rose in October for only the first time in six months, the National Association of Realtors reported Wednesday, as home prices eased and inventories improved.

NAR said total existing home increased by 1.4 percent from September to a seasonally adjusted rate of 5.22 million in October. From a year ago, sales fell by 5.1 percent. Single-family home sales rose to 4.62 million in October, up from 4.58 million in September, but were 5.3 percent below the 4.88 million sales pace from a year ago. The median existing single-family home price was $257,900 in October, up 4.3 percent from a year ago.

Existing condominium and co-op sales rose to 600,000 units in October, up 5.3 percent from last month but down 3.2 percent from a year ago. The median existing condo price fell to $236,200 in October, down 0.2 percent from a year ago.

Three of the four U.S. regions saw increases. In the South, sales rose by 1.9 percent to an annual rate of 2.15 million in October, but down 2.3 percent from a year ago. The median price in the South rose to $221,600, up 3.8 percent from a year ago. Sales in the West rose by 2.8 percent to an annual rate of 1.11 million in October, but fell by 11.2 percent fome a year ago. The median price in the West rose to $382,900, up 1.9 percent from a year ago.

Sales in the Northeast increased by 1.5 percent to an annual rate of 690,000, but were 6.8 percent below a year ago. The median price in the Northeast was $280,900, up 3.0 percent from a year ago. Only the Midwest saw a decline, falling by 0.8 percent from last month to an annual rate of 1.27 million in October, down 3.1 percent overall from a year ago. The median price in the Midwest rose to $197,000, up 2.4 percent from last year.

"Existing-home sales increased slightly in October, buoyed by a still strong job market," said Mike Fratantoni, chief economist with the Mortgage Bankers Association. "Given the rapid increase in home prices over the past few years, and the recent pick-up in mortgage rates, the housing market continues to struggle with diminished affordability. The notable deceleration in median home price growth, 3.8% in October compared to roughly 6% in 2017, is a positive sign, as it indicates that home prices are rising at a more sustainable pace."

"After six consecutive months of decline, buyers are finally stepping back into the housing market," said NAR Chief Economist Lawrence Yun.

NAR reported the median existing home price for all housing types in October was $255,400, up 3.8 percent from a year ago ($246,000). October's price increase marks the 80th straight month of year-over-year gains.

Total housing inventory at the end of October decreased from 1.88 million in September to 1.85 million existing homes available for sale, but NAR noted it represents an increase from 1.80 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, down from 4.4 last month and up from 3.9 months a year ago.

The report said properties typically stayed on the market for 33 days in October, up from 32 days in September but down from 34 days a year ago. Forty-six percent of homes sold in October were on the market for less than a month.

First-time buyers represented 31 percent of sales in October, down from last month and a year ago (32 percent). All-cash sales accounted for 23 percent of transactions in October, up from September and a year ago (21 and 20 percent, respectively). Individual investors purchased 15 percent of homes in October, up from September and a year ago (both 13 percent).

Distressed sales represented 3 percent of sales in October (the lowest since NAR began tracking in October 2008), unchanged from last month and down from 4 percent a year ago. Two percent of October sales were foreclosures; 1 percent were short sales.

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