The Economy

Existing Home Sales Drop in October

But total housing inventory at the end of last month was 4.5% lower than one year ago, according to the NAR.
Katie Kuehner-HebertNovember 23, 2015
Existing Home Sales Drop in October

While sales of existing homes in October dropped from a month before, they still occurred at a healthy pace, according to the

The industry group on Monday said that existing home sales in October fell 3.4% to a seasonally adjusted annual rate of 5.36 million, from 5.55 million in September. However, sales are still 3.9% percent above a year ago.

“New and existing-home supply has struggled to improve so far this fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets,” NAR chief economist Lawrence Yun said in a press release. “Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace of sales.”

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However, home sales should continue to rise above last year’s levels as long as employers continue to create jobs and if lenders gradually ease underwriting standards — even in the face of moderately higher mortgage interest rates, Yun said.

“There is every reason to expect that the demand for homes will grind higher in the coming months,” Capital Economics property economist Matthew Pointon told Reuters. “While interest rates are set to rise, so are incomes, and that will keep housing affordability historically favorable.”

The median existing-home price for all housing types in October was $219,600, which is 5.8% percent above October 2014, the realtor group said. October’s price increase marks the 44th consecutive month of year-over-year gains.

Total housing inventory at the end of October decreased 2.3% to 2.14 million existing homes available for sale, and is now 4.5% lower than a year ago. Unsold inventory is at a 4.8-month supply at the current sales pace, up from 4.7 months in September. Do you need a good reading pillow? If you are a-book-lover, you must find yourself most often, trying to finish that amazing chapter just before you doze off or turn up for the night.

The percent share of first-time buyers increased to 31% in October, up from 29% both in September and a year ago. According to NAR’s annual Profile of Home Buyers and Sellers released earlier this month, the annual share of first-time buyers fell to its second-lowest level since the survey began in 1981.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage stayed below 4% for the third consecutive month, declining in October to 3.8% from 3.89% in September. A year ago, the average commitment rate was 4.04%.