Existing-home sales faced a notable decline in October, according to the National Association of Realtors (NAR). The decline was observed in three of the four major U.S. regions, namely the Northeast, South, and West, while sales remained unchanged in the Midwest. Furthermore, all four regions experienced year-over-year sales declines.
Total existing-home sales, which encompass completed transactions involving single-family homes, townhomes, condominiums, and co-ops, fell by 4.1% from September to reach a seasonally adjusted annual rate of 3.79 million in October. This marked a substantial year-over-year sales drop of 14.6%, a significant decrease from the 4.44 million recorded 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,” said NAR Chief Economist Lawrence Yun. “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.”
Total housing inventory at the end of October registered at 1.15 million units, reflecting a 1.8% increase from September but remaining down 5.7% compared to the previous year (1.22 million units). Unsold inventory equates to a 3.6-month supply at the current sales pace, which is up from 3.4 months in September and 3.3 months in October 2022.
The median existing-home price for all housing types in October stood at $391,800, marking a 3.4% increase from October 2022 ($378,800). This price growth was observed across all four U.S. regions.
“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,” Yun said. “In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years.”
According to the monthly Realtors Confidence Index, properties typically spent 23 days on the market in October, up from 21 days in both September 2023 and October 2022. Of the homes sold in October, 66% were on the market for less than a month.
First-time buyers represented 28% of sales in October, a slight increase from 27% in September and identical to October 2022. NAR's 2023 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers stood at 32%.
All-cash sales accounted for 29% of transactions in October, unchanged from September but up from 26% in October 2022. Meanwhile, individual investors or second-home buyers, who often contribute to cash sales, purchased 15% of homes in October, down from 18% in September and 16% one year ago.
Distressed sales, which include foreclosures and short sales, represented 2% of sales in October, a figure virtually unchanged from the previous month and year.
Mortgage rates, as reported by Freddie Mac, showed a 30-year fixed-rate mortgage averaging 7.44% as of November 16, down from 7.5% the prior week but significantly higher than the 6.61% recorded one year ago.
“Though limited now, expect housing inventory to improve after this winter and heading into the spring. More inventory will result in more home sales," Yun said.
In October, single-family home sales declined to a seasonally adjusted annual rate of 3.38 million, representing a 4.2% drop from September and a 14.6% decrease from the previous year. The median price for existing single-family homes in October was $396,100, reflecting a 3.0% increase from October 2022.
Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 410,000 units in October, a 2.4% decline from September and a 14.6% decrease from one year ago. The median price for existing condos in October was $356,000, marking a 7.6% increase from the prior year ($331,000).
Existing home sales in the Northeast declined by 4% from September to an annual rate of 480,000 in October, down 15.8% from October 2022. The median price in the Northeast was $439,200, showing a 7.5% increase from the previous year.
In the Midwest, existing home sales remained unchanged from the prior month, with an annual rate of 930,000 in October. This marked a 13.9% year-over-year decline. The median price in the Midwest was $285,100, reflecting a 4.2% increase from October 2022.
Existing home sales in the South retracted by 7.1% from September to an annual rate of 1.69 million in October, down 14.6% from the previous year. The median price in the South was $357,700, showing a 3.5% increase from the prior year.
In the West, existing home sales decreased by 1.4% from the previous month to an annual rate of 690,000 in October, down 14.8% from one year ago. The median price in the West was $602,200, reflecting a 2.3% increase from October 2022.
