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Existing home sales hit fastest pace since January despite low inventory, higher prices

Existing home sales hit fastest pace since January despite low inventory, higher prices

Existing home sales rose 0.8% in October to a seasonally adjusted rate of 6.34 million units, the fastest pace since January but down 5.8% year-over-year, according to the National Association of Realtors. 

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Single-family homes sales increased 1.3% month-over-month but declined 5.8% year-over-year to a seasonally adjusted annual rate of 5.66 million in October, while existing condo and co-op sales fell 2.9% month-over-month and 5.6% year-over-year to a seasonally adjusted annual rate of 680,000 units. 

An open house is posted in front of a home for sale in Westfield, Indiana, Friday, Sept. 25, 2020. (AP Photo/Michael Conroy) (AP Newsroom)

Properties typically remained on the market for 18 days in October, up from 17 days in September and down from 21 days in October 2020. Approximately 82% of homes sold in October 2021 were on the market for less than a month.

Meanwhile, total housing inventory in October fell 0.8% month-over-month and 12% year-over-year to 1.25 million units. Unsold inventory, which is at a 2.4 month supply at the current sales pace, remains unchanged from the previous month and is down from 2.5 months a year ago. 

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The median existing home price in October jumped 13.1% year-over-year to $353,900, marking a record 116 straight months of year-over-year increases. The median existing single-family home price jumped 13.5% year-over-year to $360,800 in October, while the existing condo price rose 8.7% year-over-year to $296,700.

Existing home sales in the Midwest climbed 4.2% month-over-month but fell 6.3% year-over-year and existing home sales in the South rose 0.4% month-over-month but dropped 3.5% year-over-year. Existing home sales in the Northeast fell 2.6% month-over month and 13.8% year-over-year, while existing home sales in the West held steady month-over-month but are down 5.1% year-over-year. 

The median price rose 16.1% year-over-year in the South to $315,500, 7.8% year-over-year in the Midwest to $259,800, 7.7% year-over-year in the West to $507,200 and 6.4% year-over-year in the Northeast to $379,100. 

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NAR chief economist Lawrence Yun attributed the uptick in existing home sales to continued job growth, a stock market at all-time highs and rising, but still historically low mortgage rates are helping to drive home sales. Through the first 10 months of the year, home sales are up 11% from where they were last year and are 13% higher than they were in the same stretch of 2019.

“We’re easily on pace for an annual total of at least 6 million this year, which would be the best performance in 15 years,” Yun said.

However, he warned inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment. The average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.07 in October, up from 2.90% in September, according to Freddie Mac. 

First-time home buyers accounted for 29% of existing home sales in October, up from 28% in September and down from 32% in October 2020, while individual investors or second-home buyers purchased 17% of homes in October, up from 13% in September and 14% in October 2020. All-cash sales accounted for 24% of transactions in October, up from 23% in September and from 19% in October 2020.

The Associated Press contributed to this report

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