Existing home sales broke a string of six straight monthly declines in October, the National Association of Realtors (NAR) reported.
Compared to September, the sales of existing single-family homes, townhomes, condominiums and co-ops rose 1.4 percent to a seasonally adjusted rate of 5.22 million in October, putting 2018 sales down 5.1 percent from a year ago (5.5 million in October 2017).
Increasing housing inventory has brought more buyers to the market, said NAR Chief Economist Lawrence Yun in a statement. “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.”
Prices increased along with sales. The median existing-home price for all housing types in October was $255,400, up 3.8 percent from October 2017 ($246,000), marking the 80th straight month of year-over-year gains, the report indicated.
“As more inventory enters the market and we head into the winter season, home price growth has begun to slow more meaningfully,” Yun said. “This allows for much more manageable, less frenzied buying conditions.”
Total housing inventory was 1.85 million at the end of the month, down from 1.88 million in the month earlier. At the current pace of sales, unsold inventory stood at 4.3 months, down from 4.4 months in September and up from 3.9 months a year ago.
According to the NAR, 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.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 4.83 percent in October from 4.63 percent in September. The average commitment rate for all of 2017 was 3.99 percent.
“Rising interest rates and increasing home prices continue to suppress the rate of first-time homebuyers. Home sales could further decline before stabilizing,” Yun said. “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.”