Existing-home sales reached a seasonally adjusted annual rate of 5.26 million in October, an increase of 1.5% from an upwardly revised 5.18 million in September, according to the National Association of Realtors (NAR).
‘Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,’ says Lawrence Yun, chief economist for NAR, in a statement. ‘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-over-year sales increases.’
The increase in existing-home sales came despite the fact that inventory was actually tighter compared to the previous month. According to the report, total inventory at the end of October fell 2.6% to 2.22 million existing homes available for sale – a 5.1-month supply at the current sales pace.
However, as the report points out, unsold inventory was 5.2% higher compared to October 2013, when there were 2.11 million existing homes available for sale.
‘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,’ says Yun. ‘However, more housing starts are needed to increase supply, meet current demand and keep price growth in check.’
Meanwhile, home prices continued to climb in October: The median existing-home price for all housing types (including condos) was $208,300 – an increase of 5.5% compared to October 2013.
All-cash sales rebounded slightly in October, according to the report, reaching 27% of all transactions – up from 24% in September, but down from 31% in October of last year.
Individual investors purchased 15% of homes in October – up from 14% the previous month, but down 19% compared to October 2013. Further, 65% of investors paid cash in October.
The share of first-time buyers remained at 29%.
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