US existing house sales are up for the first time in six months.
Existing-home sales in the South rose 1.9% to an annual rate of 2.15million in October. That’s according to the latest data from the National Association of Realtors.
The median price in the South was $221,600, up 3.8% on a year ago.
Total existing-home sales rose 1.4% from September to a seasonally adjusted 5.22million in October. These are completed transactions that include single-family homes, townhomes, condominiums and co-ops. However, sales are down 5.1% from a year ago to 5.5million.
US existing house sales are up for the first time in six months
Lawrence Yun, NAR’s chief economist, says increasing housing inventory has brought more buyers to the market. “After six consecutive months of decline, buyers are finally stepping back into the housing market.
“Gains in the Northeast, South and West – a reversal from last month’s steep decline or plateau in all regions – helped overall sales activity rise for the first time since March 2018.”
The median existing-home price for all types in October was $255,400, up 3.8% from $246,000 in October 2017. The latest price increase marks the 80th straight month of year-over-year gains.
Total housing inventory at the end of October decreased from 1.88million in September to 1.85million existing homes available for sale, but that is up from 1.80million 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.
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. Just under half (46%) of homes sold in October were on the market for less than a month.
Even though US existing house sales are up for the first time in six months, Mr Yun says, “As more inventory enters the market and we head into the winter season, home price growth has begun to slow more meaningfully.
“Rising interest rates and increasing home prices continue to suppress the rate of first-time homebuyers. Home sales could further decline before stabilizing. The Federal Reserve should, therefore, re-evaluate its monetary policy of tightening credit, especially in light of softening inflationary pressures, to help ease the financial burden on potential first-time buyers and assure a slump in the market causes no lasting damage to the economy.”
Welcomed month-over-month gain
First-time buyers were responsible for 31% of sales in October, down from last month and a year ago (32%).
NAR President John Smaby also outlines why US existing house sales are up for the first time in six months. “Despite this much-welcomed month-over-month gain, sales are still down from a year ago, a large reason for which is affordability challenges from higher interest rates.”
All-cash sales accounted for 23% of transactions in October, up from September and a year ago (21% and 20% respectively). Individual investors, who account for many cash sales, purchased 15% of homes in October, up from September and a year ago (both 13%).
Distressed sales – foreclosures and short sales – represented 3% of sales in October (the lowest since NAR began tracking in October 2008), unchanged from last month and down from 4% a year ago.
Single-family home values up 4.3% in last year
Single-family home sales reached a seasonally adjusted annual rate of 4.62million in October, up from 4.58million in September. However, this is 5.3% below the 4.88million sales pace from a year ago. The median existing single-family home price was $257,900 in October, up 4.3% from October 2017.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 600,000 units in October, up 5.3% from last month but down 3.2% from a year ago. The median existing condo price was $236,200 in October, which is down 0.2% from a year ago.