October Existing Home Sales Dip

Existing home sales fell by 3.4 percent in October, the National Association of Realtors reported yesterday.  

Total existing home sales fell to a seasonally adjusted annual rate of 5.36 million in October from 5.55 million in September. Despite the decline, sales remained up by 3.9 percent above a year ago (5.16 million).  

Single-family home sales fell by 3.7 percent 4.75 million in October from 4.93 million in September, but remained 4.6 percent above the 4.54 million pace a year ago. The median existing single-family home price rose to $221,200 in October, up 6.3 percent from a year ago. Existing condominium and co-op sales declined by 1.6 percent to 610,000 units in October from 620,000 in September and fell by 1.6 percent from a year ago (620,000 units). The median existing condo price rose to $207,100 in October, up by 1.6 percent from a year ago.  

Regionally, sales fell everywhere except the Northeast, which was unchanged at 760,000 from September and up by 8.6 percent from a year ago. The median price in the Northeast rose to $248,900, up by 1.3 percent from a year ago.  

In the Midwest, existing home sales fell by 0.8 percent to 1.30 million in October, but improved by 8.3 percent from a year ago. The median price in the Midwest was $172,300, up 5.7 percent from a year ago. Sales in the South decreased by 3.2 percent to 2.14 million in October, but improved by 0.5 percent from a year ago. The median price in the South was $188,800, up 6.2 percent from a year ago. Sales in the West fell by 8.7 percent to 1.16 million in October, but improved by 2.7 percent from a year ago. The median price in the West rose to $319,000, up by 8.0 percent above October 2014.  

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said existing home sales continue to be restrained by unusually low inventories.  

“The lack of inventory has pushed prices higher, particularly in the West and South where the population is growing rapidly,” Vitner said. “Home prices have risen faster than incomes have, which means affordability is declining. The slide will worsen if mortgage rates increase during the coming year, which now seems likely.”  

NAR Chief Economist Lawrence Yun said the sales cooldown in October resulted in part from a pullback in contract signings the past several months. “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,” he said. “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.”  

The report said the median existing-home price for all housing types in October came in at $219,600, 5.8 percent above a year ago ($207,500). October’s price increase marks the 44th consecutive month of year-over-year gains. Total housing inventory at the end of October decreased by 2.3 percent to 2.14 million existing homes available for sale, 4.5 percent lower than a year ago (2.24 million). Unsold inventory is at a 4.8-month supply at the current sales pace, up from 4.7 months in September.  

NAR said the percent share of first-time buyers increased to 31 percent in October, up from 29 percent both in September and a year ago. All-cash sales totaled 24 percent of transactions in October (unchanged from September) and were down from 27 percent a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in October, unchanged from September but down from 15 percent a year ago. Sixty-two percent of investors paid cash in October.  

The report said distressed declined to 6 percent in October, the lowest since NAR began tracking in October 2008; they were 9 percent a year ago. Five percent of October sales were foreclosures; 1 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in October (17 percent in September), while short sales were discounted 8 percent (19 percent in September).  

The report said properties typically stayed on the market for 57 days in October, an increase from 49 days in September but below the 63 days a year ago. Short sales were on the market the longest at a median of 90 days in October, while foreclosures sold in 67 days and non-distressed homes took 57 days. One-third of homes sold in October were on the market for less than a month.