Existing home sales rose in the US increased in October for the second straight month and are now above year on year levels for the first time in a year, according to the latest report from the National Association of Realtors.
Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 1.5% to a seasonally adjusted annual rate of 5.26 million in October from an upwardly revised 5.18 million in September.
Sales are at their highest annual pace since September 2013 when they were also 5.26 million and are now above year on year levels for the first time since last October.
Lawrence Yun, NAR chief economist, said that the housing market this year has been a tale of two halves. ‘Sales activity in October reached its highest annual pace of the year as buyers continued to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,’ he explained.
‘Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year on year sales increases,’ he added.
The data also shows that the median existing home price for all housing types in October was $208,300, which is 5.5% above October 2013 and the 32ndconsecutive month of year on year price gains.
Total housing inventory at the end of October fell 2.6% to 2.22 million existing homes available for sale, which represents a 5.1 month supply at the current sales pace, the lowest since March. Unsold inventory is now 5.2% higher than a year ago, when there were 2.11 million existing homes available for sale.
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‘The growth in housing supply this year will likely prevent the drastic sales slowdown and coinciding spike in home prices we saw last winter due to low inventory. However, more housing starts are needed to increase supply, meet current demand and keep price growth in check,’ said Yun.
All cash sales were 27% of transactions in October, up from 24% in September but down from 31% in October of last year. Individual investors, who account for many cash sales, purchased 15% of homes in October, up from 14% from the previous month but below October 2013 when it was 19%. Some 65% of investors paid cash in October.
The percent share of first time buyers in October remained at 29% for the fourth consecutive month. First time buyers have represented less than 30% of all buyers in 18 of the past 19 months. A separate NAR survey has found that the annual share of first time buyers fell to its lowest level in nearly three decades.
Distressed sales were in the single digits for the third month this year, decreasing to 9% in October from 10% in September and 14% a year ago. Some 7% of October sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 15% below market value in October compared with 14% in September, while short sales were discounted 10% compared to 14% in September.
‘Although distressed sales are trending downward, there are still areas such as judicial states Florida, Maryland and New York, plagued by foreclosures, and homeowners faced with the awful choice between a tax bill they are unable to pay and losing their home,’ said NAR president Chris Polychron.
Properties typically stayed on the market in October longer at 63 days compared to 56 days last month and 54 days a year ago. Short sales were on the market for a median of 150 days in October, while foreclosures sold in 68 days and non-distressed homes took 61 days. Some 33% of homes sold in October were on the market for less than a month.
A breakdown of the figures shows that single family home sales increased 1.3% to a seasonally adjusted annual rate of 4.63 million in October from 4.57 million in September, and are now 2.9% above the 4.50 million pace a year ago. The median existing single family home price was $208,700 in October, up 5.6% from October 2013
Existing condominium and co-op sales increased 3.3% to a seasonally adjusted annual rate of 630,000 units in October from 610,000 in September, unchanged from the 630,000 unit pace a year ago. The median existing condo price was $205,400 in October, which is 4.5% higher than a year ago.
Regionally, October existing home sales in the Northeast climbed 2.9% to an annual rate of 710,000, and are 4.4% above a year ago. The median price in the Northeast was $246,900, which is 1.2% above a year ago.
In the Midwest, existing home sales jumped 5.1% to an annual level of 1.24 million in October, and are 2.5% higher than October 2013. The median price in the Midwest was $164,100, up 6.8% from a year ago.
Existing home sales in the South increased 2.8% to an annual rate of 2.17 million in October, and are now 5.3% above October 2013. The median price in the South was $178,000, up 5.1% from a year ago.
Existing home sales in the West declined 5% to an annual rate of 1.14 million in October, and remain 3.4% below a year ago. The median price in the West was $296,800, which is 5% above October 2013.
This article was republished with permission from Property Wire.