Existing-Home Sales Slumped 5.9% in OctoberBy RISMedia Staff
Existing-home sales retreated for the ninth straight month in October, and all four major U.S. regions registered month-over-month and year-over-year declines, according to the National Association of REALTORS®’ (NAR) recent existing home sales report.
NAR’s October report found that total existing-home sales decreased 5.9% from September to a seasonally adjusted annual rate of 4.43 million. Year-over-year, sales dropped by 28.4% (down from 6.19 million last year). Key data points:
“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher. The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years. “Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers. In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%. “Mortgage rates have come down since peaking in mid-November, so home sales may be close to reaching the bottom in the current housing cycle. “It’s a good thing the job market is still creating jobs, it’s creating a pull to the market. [Next year] the job creating areas and affordable areas will see some price gain” Danielle Hale, Chief Economist at realtor.com®, commented: “Existing home sales weakened further in October, following a sharper pullback in September pending home sales. A summer lull in mortgage rates, from mid June until early August, followed by a sharp spike from August to late October likely accelerated purchasing timelines for some shoppers. Others, who might have continued searching into the fall season, likely had their plans cut short as rising mortgage rates moved the affordability of buying a home out of reach. “In the weeks ahead, we will see if the latest turn in mortgage rates, a drop to 6.61%, will motivate sidelined shoppers to reconsider buying in the near future. With week-to-week changes in mortgage rates causing $100+ swings in monthly housing costs for a median-priced home, it’s tough to know how to set and stick to a budget. If so, home sales are likely to remain at lower levels, and we’ll see home price deceleration in the months ahead. “In September, the median home sales price remained higher than one year ago, but again, the pace of growth dipped. In a rising housing cost environment, affordable areas in the Midwest and Northeast are at an advantage. The Realtor.com October Hottest Markets Report shows that these lower-cost regions are home to real estate markets that remain relatively active. “At the same time, the pace of housing cost increases may cool as the greater availability of homes for sale helps rein in home price growth. In the Realtor.com Weekly Housing Trends View, we’ve seen the number of actively for-sale homes continue to climb each week into mid-November, causing a slowdown in median list price growth. Meanwhile, the Realtor.com October Rental Report shows a similar slowdown in rent growth as households seek affordability and landlords rethink pricing strategies. The end to seemingly relentless and inescapable shelter inflation for both renters and home buyers may be on the horizon.” For the full report, click here. |
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