The amounts: In October, sales of existing homes went up because buyers took advantage of the time when mortgage rates were low.
On Thursday, the National Association of Realtors said that sales of previously owned houses rose 3.4% in October, to 3.96 million units per year.
That’s how many homes would be sold in a year if they were sold at the same rate every month like they were in October. Seasonal changes are made to the numbers.
Economists polled by Dow Jones Newswires and the Wall Street Journal thought that the rate of sales would rise to 3.95 million, which is pretty much what happened.
Even though the number of current home sales went up in October, it was still less than 4 million, which is a key number for the real estate industry. This means that home sales are still lower than they were before the pandemic.
Still, sales went up 2.9% year-over-year, which was the first increase since July 2021, according to the NAR.
Important facts: Between September and October of last year, the typical price of a previously owned home went up 4%, to $407,200. That’s the most that has ever been paid in October.
It’s down from 20% a month ago to 19%, but still 19% of homes were sold above the list price. On average, there were 2.5 offers on each home.
In October, there were 1.37 million houses on the market, which is 19% more than the same month last year. The amount of unsold goods is enough to last for 4.2 months, which means the market is balanced.
The average length of time a home was on the market was 29 days, up from 28 days the month before.
All over the U.S., sales of existing houses went up. In October, sales went up the most, by 6.7% in the Midwest.
27% of sales went to people who paid cash only. Individual owners or people buying a second home made up 17% of the group.
27% of the homes that were sold were to people who were buying their first home. The NAR said that people who are buying their first home are waiting longer before they do so.
Homes that cost more were selling faster. Homes that cost more than $500,000 saw the most sales growth.
As a whole, more homes were sold in October because mortgage rates went down and more homes were put on the market.
But now that the 30-year mortgage rate is back at 7%, it’s not clear what will happen with home sales.
Homeownership is less possible for buyers now that interest rates are going up and home prices are going up.
Still, some people in the business say that more buyers are looking around. A recent report from real estate company Redfin RDFN 3.07% said that it is seeing a “burst” of action after the election.
What the NAR said: “Perhaps the worst of the drop in home sales is over,” said Lawrence Yun, the NAR’s top economist.
“More jobs and steady economic growth look likely, which will lead to a higher demand for housing,” he said.
But for now, Yun told reporters on the phone, “home sales simply cannot remain at this low level… given job growth and now inventory growth.”
It’s possible that mortgage rates will go down and home sales will pick up if the Federal Reserve cuts interest rates again in the next few months, Yun said.
What do they mean? “Gainful possession sales of existing homes picked up in October thanks to lower mortgage rates and more listings,” said Ben Ayers, a senior economist at Nationwide. “Sales hit a cycle low in September.”
But “again rising mortgage rates through mid-November suggests that sales should remain slow through the end of the year, even though availability is improving in many areas,” he said.
In a note, Ruben Gargallo Abargues of Capital Economics said, “We don’t think that conditions for would-be homebuyers and sellers will get much better in the near future. Borrowing costs are expected to stay around current levels through the first half of next year, before some modest relief arrives later in 2025 and into 2026.” “This means that the market is most likely going to stay flat for a while longer.”
Real estate stocks like Compass (COMP 4.04%), Redfin, and Zillow (Z 5.89%) were all over the place when the market opened on Thursday. This 10-year Treasury bond had a yield of 4.436%, which was more than 4.3%.
