Annual sales of existing homes increased in October for the first time in more than three years, according to the National Association of Realtors. “The worst of the downturn in home sales may be over.”
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Annual sales of existing homes increased in October for the first time in three years, according to the National Association of Realtors’ latest market report.
Existing home sales, which include single-family homes, townhomes, condos and co-ops, rose 3.4% month over month and 2.9% year over year to a seasonally adjusted 3.96 million units. The median home price increased 4.0% year over year to $391,600, with prices increasing in all four regions.
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Lawrence Yun
NAR Chief Economist Lawrence Yun said October’s results offer hope that the worst of the sales downturn is over, as economic growth and stable mortgage rates bring homebuyers back to the market. said.
“The worst of the downturn in home sales may be over, as increased inventory has led to more transactions,” Yun said in a statement. “Further job growth and continued economic growth are certain, leading to increased demand for housing.”
Home sales increased on an annual basis in the Midwest (up 1.1 percent), South (up 2.3 percent), and West (up 8.5 percent), while sales were unchanged in the Northeast. At the current sales pace, there will be only 4.2 months of unsold inventory, resulting in total housing inventory of 1.37 million units, an increase of 0.7% month-on-month and 19.1% year-on-year.
“However, for most first-time homebuyers, mortgage financing is very important. Although mortgage rates remain high, they are expected to stabilize going forward,” Yun added. “Continued price increases mean increased wealth for homeowners across the country. Added inventory and increased homebuilding activity will likely moderate price increases next year.”
Daniel Hale
Daniel Hale, chief economist at Realtor.com, said October’s existing home sales reflected the influence of mortgage rates on the housing market. The Fed has lowered the federal funds rate twice in the past two months. However, mortgage rates remain stubbornly in the low 6% range.
“October data shows that mortgage rates continue to be an important mediator of home sales activity,” he said in an emailed statement. “Mortgage rates have risen sharply since September despite the Fed’s rate cuts, which will likely weigh on home sales activity in early 2025.”
Hale said homebuyers who qualify for VA loans will have a competitive advantage in the market because interest rates on conventional loans remain high.
“At a time when affordable housing is in short supply for many buyers, homebuyers who qualify for VA loan benefits may have an advantage,” she said. “According to research from Realtor.com, buyers who took out VA loans had smaller down payments, lower credit scores, and lower mortgage rates than similar buyers who took out conforming loans. Learn about these benefits and take advantage of them. For qualified buyers, these benefits can translate into substantial savings on their monthly mortgage costs.”
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