Existing Home Sales Have Sunk

Existing Home Sales Have Sunk to Their Lowest Point Since 2010

A report from the National Association of REALTORS® (NAR) shows a decline in total existing home sales for October. Sales dipped in the Northeast, West, and South but held steady in the Midwest. All four regions saw annual sales declines.

October’s total existing home sales—including single-family homes, condos, townhomes, and co-ops—dropped 4.1% month over month to a seasonally adjusted annual rate of 3.79 million.

Year over year, existing home sales fell 14.6% (from 4.44 million in October 2022).

Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation. Multiple offers, however, are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market. Lawrence Yun – NAR Chief Economist

MONTHLY UPTICK IN INVENTORY AND ANNUAL INCREASE IN MEDIAN HOME SALE PRICES

At the end of October, total housing inventory reached 1.15 million units—up 1.8% from the previous month but down 5.7% from October 2022 (1.22 million).

Unsold inventory increased to a 3.6-month supply at the current monthly sales pace—up from 3.4 months in September and from 3.3 months in October 2022.

The median existing home price in October—for all housing types—rose 3.4% from October 2022 ($378,000) to $391,800. All four U.S. regions registered median home price increases.

While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October. In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years. Lawrence Yun – NAR Chief Economist

MONTHLY AND ANNUAL STATS FOR HOME SALES

According to the monthly REALTORS® Confidence Index, for-sale properties typically spent 23 days on the market this October—up from the 21 days recorded for both September 2023 and October 2022.

Nearly two-thirds (66%) of homes sold in October spent less than a month on the market.

Other home sales highlights for October 2023:

First-time homebuyers accounted for 28% of home sales—up from 27% the previous month and identical to October 2022.
The annual share of first-time buyers was 32%, according to NAR’s 2023 Profile of Home Buyers and Sellers (released on November 13).
All-cash sales accounted for over a quarter (29%) of October transactions—identical to the previous month but up from 26% in October 2022.
Individual investors or second-home buyers, responsible for many of those all-cash sales, bought 15% of the homes sold in October—down from 18% the previous month and 16% one year ago.
Distressed sales—i.e. foreclosures and short sales—accounted for 2% of home sales in October—unchanged from September and from a year ago.

MORTGAGE RATES ARE DOWN MONTH-OVER-MONTH—BUT STILL UP FROM A YEAR AGO

As of November 16, the 30-year fixed mortgage rate, according to Freddie Mac, averaged 7.44%—down from 7.50% the week before but up from 6.61% one year ago. Today’s rate (November 22) is down to 7.33%, dropping 0.05 percentage points from yesterday.

Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest. Though limited now, expect housing inventory to improve after this winter and heading into the spring. More inventory will result in more home sales. Lawrence Yun – NAR Chief Economist

SINGLE-FAMILY AND CONDO/CO-OP SALES

Single-family home sales dropped to a seasonally-adjusted annual rate of 3.38 million—down 4.2% from September’s 3.53 million and down 14.6% from October 2022. The median existing single-family home price rose 3.0% year over year to $396,100.

Existing condominium and co-op sales dropped 2.4% month over month and 14.6% year over year in October to a seasonally-adjusted annual rate of 410,000 units. The median existing condo price increased year over year to $356,000—up 7.6% from October 2022 ($331,000).

REGIONAL BREAKDOWN OF EXISTING HOME SALES

October’s existing home sales stats by U.S. region:

Northeast—Existing home sales slid 4.0% from September to an annual rate of 480,000, down 15.8% from a year ago. The median home price rose 7.5% year over year to $439,200.
Midwest—Existing home sales held steady from September at an annual rate of 930,000, down 13.9% from October 2022. The median home price rose 4.2% year over year to $285,100.
South—Existing home sales fell 7.1% from the month before to an annual rate of 1.69 million, a 14.6% drop from one year ago. The median home price rose 3.5% year over year to $357,700.
West—Existing home sales dropped 1.4% from September to an annual rate of 690,000, down 14.8% from October 2022. The median home price rose 2.3% year over year to $602,200.

Key Points:

According to the National Association of Realtors® (NAR), existing home sales in October hit their lowest point since 2010, dropping 4.1% from September and falling 14.6% year over year.
The median existing home sale price rose 3.4% year over year to $391,800, marking the fourth consecutive month of annual price increases.
The inventory of unsold existing homes rose 1.8% month over month to 1.15 million at the end of October—equaling 3.6 months’ supply at the current sales pace.

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Posted by Sarah Lentz | Nov 22, 2023 | Housing Market