October saw existing-home sales rise 1.6% over last month, marking the largest gain since January 2022 to reach a seasonally adjusted annual rate of 4.18 million, according to a new Redfin report.
Compared to last year, sales increased 1.7%, marking the first annual gain since November 2021. And, with total existing-home sales expected to finish 2024 slightly higher than last year’s 4.09 million, the current market shows signs of resilience.
Overall home sales, including both existing and newly built homes, increased in October, rising 1.6% month over month and 3.4% year over year. This represents the highest sales level in over 18 months on a seasonally adjusted basis.
Median Prices and Buyer Activity
The median home sale price in October rose 5.2% from last year to $435,313, the biggest annual gain in six months.
This growth in sales was fueled by a drop in mortgage rates, which reached a two-year low in September, improving purchasing power for buyers. After the Federal Reserve reduced its benchmark interest rate on September 18, mortgage rates briefly bottomed at 6.08% during the week ending September 26.
Many buyers locked in favorable rates during this window, driving September's surge in pending home sales, which translated into completed sales in October.
Challenges Ahead: Mortgage Rates and Election Uncertainty
Pending sales dipped 1.1% month over month in October as mortgage rates rebounded to 6.78%, near the highest levels since July. The rate increase, coupled with uncertainties surrounding the presidential election and the economic impact of hurricanes in the Southeast, deterred some buyers.
Approximately 53,000 home purchase agreements were canceled in October, equating to 15.5% of contracts — the highest cancellation rate in nearly a year.
“Buyers came off the sidelines when mortgage rates dropped, but now that rates spiked back up, things have slowed down again,” said Stayce Mayfield, a Redfin Premier agent in St. Louis. “Some buyers didn’t lock in their rates and are now facing quotes of 7%, compared to the 6% they anticipated.”
Post-Election Demand Recovery
Encouragingly, Redfin data shows signs of recovery post-election. Buyer demand through Redfin’s platform was 25% higher this past weekend compared to the same weekend last year, marking the most significant year-over-year gain since the 2022 downturn.
Pending sales were up 3.5% year over year in October, the third consecutive annual gain, signaling momentum in the market despite short-term hurdles.
Market Trends and Challenges for Sellers
The average home took 41 days to sell in October, the longest October duration since 2019. Just 35% of homes went under contract within two weeks, down from 40.4% a year earlier.
Sellers face increasing scrutiny from price-savvy buyers. Many homes remain unsold due to overpricing, leading to a buildup of stale listings. Active listings hit their highest seasonally adjusted level in four years last month.
“Buyers know what they’re paying for and want value for their money,” said Cory Kirkland, a Redfin Premier agent in Columbus, OH. “Sellers asking $500,000 for a home they bought in 2020 for $350,000 without significant upgrades are finding buyers unwilling to compromise.”
In October, only 27.7% of homes sold above asking price, down from 31.7% a year earlier and the lowest October share since 2019.
