The National Association of Realtors reports that sales of previously owned houses were 4.1% lower in October than in September, with an annualized rate of 3.79 million units. This rate takes into account the time of year.
It had been eight months since sales were that slow. Analysts thought the drop would be smaller, to 3.9 million units. Sales were 14.6% less than at the same time last year.
Contracts that were signed in August and September are likely where the October sales number comes from. By the middle of October, the average rate on a 30-year fixed mortgage had gone up by over 8%. It had dropped to almost 7% at the end of August. Since then, rates have gone down a bit.
Lawrence Yun, NAR’s chief economist, said, “Prospective home buyers had another tough month because there aren’t enough homes for sale and mortgage rates are at their highest level in a generation.” Even though prices are going down on the higher end of the market, there are still multiple offers on homes in the lower to moderate price range.
A year ago, there were 1.15 million homes for sale at the end of October. This is 5.7% less than this year. About half as many homes are for sale now as there were before COVID. That’s enough for 3.6 months of sales at the current rate. A market with enough goods to last for six months is said to be fair between buyers and sellers.
Prices stayed low because of a lack of supplies. This October, the typical price of an existing home that was sold was $391,800. This is 3.4% more than the same month last year, when it was $378,000.
In every part of the country, prices went up. For four months in a row, these yearly price hikes have been getting bigger. About 28% of homes went for more than what they were listed for.
“Things are still tough for buyers, but home sellers have done well as prices keep going up year over year, setting a new all-time high in October,” Yun said. “In fact, the average homeowner has made more than $100,000 from their home in the last three years.”
Up to $750,000, sales dropped in all price ranges, but sales of more expensive homes went up. There were a little more than 9% more homes priced above $1 million than there were a year ago. Rich owners either don’t need mortgages or don’t care as much when the monthly rate changes. Yes, Yun also said that there are more houses for sale in the more expensive range.
In October, 28% of sales went to first-time buyers. This was the same percentage as a year ago and still a lot less than the 40% share that first-time buyers have generally held. Investors bought only 15% of the homes, less than the 18% that were bought in September and the 16% that were bought a year ago. 29% of sales were all cash, up from 26% in October 2022.
