Existing Homes Sales Stronger than Expected in October

The National Association of Realtors (NAR) said existing home sales in October rose 2.0% to a seasonally adjusted annual rate of 5.48 million, the strongest pace since earlier this summer. Existing home sales activity–which are completed transactions that include single-family homes, townhomes, condominiums and co-ops,–picked up for the second straight month in October.

All four major regions saw increases and, after last month’s increase, sales are at their strongest pace since June (5.51 million). But they still remain 0.9% below a year ago largely due to supply shortages leading to fewer closings on an annual basis for the second straight month.

“Job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home,” Lawrence Yun, NAR chief economist said. “While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated.”

The median price for existing homes for all housing types in October was $247,000, up 5.5% from October 2016 when it was $234,100. October’s price increase marks the 68th straight month of year-over-year gains.

“The residual effects on sales from Hurricanes Harvey and Irma are still seen in parts of Texas and Florida,” Mr. Yun added. “However, sales should completely bounce back to their pre-storm levels by the end of the year, as demand for buying in these areas was very strong before the storms.”

Total housing inventory at the end of October fell 3.2% to 1.80 million and is now 10.4% lower than a year ago (2.01 million). Inventory has fallen year-over-year for 29 consecutive months and unsold inventory is at a 3.9-month supply at the current sales pace, down from 4.4 months a year ago.

Properties typically stayed on the market for 34 days in October, which is unchanged from last month and down from 41 days a year ago. Forty-seven percent (47%) of homes sold in October were on the market for less than a month.