Sales of previously inhabited US homes rose in October, their highest annual rate since January, despite competition for a relatively small number of properties on the market pushed prices up.
The National Association of Realtors said Monday that sales of existing homes rose 0.8% last month from September to 6.34 million units per year on a seasonally adjusted basis. That was more than economists had expected at 6.18 million, according to FactSet.
Sales fell 5.8% from last October, when they peaked after the summer and fall spikes as buyers who had abstained in the early days of the pandemic returned to the market.
“It looks like the housing market remains strong, resilient, and one might even say (had) something of a small spike rather than the big one we saw last year,” said Lawrence Yoon, NAR’s chief economist.
Continuous job growth, record highs in the stock market and growth, but still historically low mortgage rates, are helping to boost home sales, Yoon said.
Strong demand continues to drive up the value of the home. The national average home price jumped to $ 353,900 last month, up 13.1% from last October, the NAR said.
Although overall sales were different by region. Sales fell 2.6% last month in the northeast and unchanged in the west. Sales were up 4.2% in the Midwest and 0.4% in the South. Sales in each region have declined since October last year.
In the first 10 months of the year, home sales were up 11% year-over-year and 13% higher than the same period in 2019.
“We are easily approaching an annual target of at least 6 million this year, which will be the best in 15 years,” Yun said.
Home sales have been steady for most of this year, fueled by the constant desire by many people to get more space to ride out the coronavirus pandemic. Mortgage rates are also historically low, although they have started to rise gradually in recent weeks.
The average rate on a 30-year mortgage was 3.1% last week, up from 2.98% in the previous week. A year ago this figure was 2.72%. This upward trend is prompting some would-be homeowners to act more quickly.
Homes continue to be sold for several days after being put up for sale. Homes typically remained on the market for 18 days before being sold out last month. This follows a six month series of homes that typically sell after 17 days on the market. In a market that is more evenly balanced between buyers and sellers, houses typically remain on the market for 45 days. A total of 82% of homes sold in October were on the market for less than a month, the NAR reported.
At the end of October, stocks of unsold homes stood at just 1.25 million homes for sale, down 0.8% from September and 12% less than a year earlier. According to the NAR, at the current pace of sales, this is 2.4 months.
Despite historically low interest rates, the lack of supply, coupled with soaring house prices, has disappointed many potential buyers, especially those buying homes in the more affordable segment of the market.
Among homes valued at $ 150,000 or less, sales fell 24% last month, reflecting a shortage of properties available in this price range. Home sales in the $ 250,000 to $ 500,000 range fell 2%. Most of the October increase in home sales was concentrated on properties selling for $ 750,000 and above, according to the NAR.
New buyers accounted for 29% of homes sold in the last month, up from 28% in September. According to the NAR, in October last year, they accounted for 32% of sales.
Investors, meanwhile, accounted for 17% of sales last month, up from 13% in September and 14% in October last year. According to the NAR, cash sales accounted for 24% of transactions in the last month. This has grown from 23% in September and 19% in October 2020.