Existing-home sales down in October as market responds to high rates
Mortgage rates have been coming down over the last few weeks, but that was not the case in October, when they reached their peak for the year. That put pressure on homebuyers and we saw that play out in existing-home sales numbers from last month, according to the National Association of Realtors® (NAR).
Existing-home sales were down in three out of the four major regions in the US in October. Sales numbers were unchanged from September in the Midwest, region but were down in the other four. Overall, existing-home sales fell 4.1% from September to a seasonally adjusted annual rate of 3.79 million, and year-over-year, sales tumbled 14.6% from October 2022.
Here’s how the number broke out by region:
- Northeast: Down 4.0%, an annual rate of 480,000, down 15.8% from October 2022
- Midwest: Unchanged at 0% to an annual rate of 930,000, down 13.9% from October 2022
- South: Down 7.1% to an annual rate of 1,690,000, down 14.6% from October 2022
- West: Down 1.4% with an annual rate of 690,000, down 14.8% from October 2022
First-time buyers were responsible for 28% of sales in October, up from 27% in September 2023 and the same amount as a year ago. All-cash sales made up 29% of transactions in October, up from 26% in September 2022 but holding steady from September. Individual investors or second-home buyers, were responsible for 15% of home sales, down from 18% in September.
This remains a difficult market for first-time homebuyers, but there are some ways for them to give themselves a better chance to get a home.
Inventory and affordability concerns
"Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation," said NAR Chief Economist Lawrence Yun. "Multiple offers, however, are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market."
Total housing inventory went up for second month in a row in October, rising 1.8% to 1.15 million units. Inventory is down 5.7% from a year ago, when there were 1.22 million units for sale. The lack of homes for sale is keeps pushing home prices up. The median existing-home price came in at $391,800, a 3.4% increase from last year.
Month | Median existing-home price | Month-over-month | Year-over-year |
$379,100 | Down 1.5% | Up 6.6% | |
$370,700 | Down 2.2% | Up 3.5% | |
$366,900 | Down 1.0% | Up 2.3% | |
$359,000 | Down 2.2% | Up 1.3% | |
$363,000 | Up 1.1% | Down 0.2% | |
$375,700 | Up 3.5% | Down 0.9% | |
$388,800 | Up 3.5% | Down 1.7% | |
$396,100 | Up 1.9% | Down 3.1% | |
$410,200 | Up 3.6% | Down 0.9% | |
$406,700 | Down 0.9% | Up 1.9% | |
$407,100 | Up 0.1% | Up 3.9% | |
$394,300 | Down 3.1% | Up 2.8% | |
October | $391,800 | Down 0.6% | Up 3.4% |
"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 says. "In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years."
This downward trend in home prices could be good news for buyers on the sidelines, along with the fact that mortgage rates in November have been on a downward trajectory as well. "Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest," Yun adds. "Though limited now, expect housing inventory to improve after this winter and heading into the spring. More inventory will result in more home sales."
If you’re in the market, reach out to a loan officer, or get started by getting pre-approved for a mortgage in just a few minutes.
Source: https://www.nar.realtor/newsroom/existing-home-sales-receded-4-1-in-october
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