With October featuring rising mortgage rates and falling home affordability, sales of existing homes retreated for the ninth straight month, the National Association of Realtors (NAR) said Friday.
All four U.S. regions reported month-over-month and year-over-year declines.
According to the NAR's report, total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums, and co-ops — fell 5.9% from September to a seasonally adjusted annual rate of 4.43 million in October. Sales were also down 28.4% from 6.19 million in October 2021.
"More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher," said NAR Chief Economist Lawrence Yun. "The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years."
Inventory Fell
The overall housing inventory at the end of October was 1.22 million units, down 0.8% from both September and a year earlier (1.23 million). Unsold inventory grew to a 3.3-month supply at the current sales pace, up from 3.1 months in September and 2.4 months in October last year.
"Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers," Yun said. "In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%."
The median price for all types of existing homes in October was $379,100, up 6.6% from $355,700 in October 2021, as prices rose in all regions. It marked the 128th consecutive month of year-over-year increases, the longest streak on record.
Existing homes typically remained on the market for 21 days in October, up from 19 days in September and 18 days a year earlier. Of the homes sold in October, 64% were on the market for less than a month, NAR said.
First-time buyers accounted for 28% of sales in October, down from 29% in both September 2022 and October 2021. NAR's 2022 Profile of Home Buyers and Sellers — released earlier this month — found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 26% of transactions in October, up from 22% in September and 24% in October 2021. Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in October, up from 15% in September, but down from 17% in October 2021.
Distressed sales — which include foreclosures and short sales — represented just 1% of sales in October, down from 2% in September but identical to October 2021.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.9% in October, up from 6.11% in September. The average commitment rate across all of 2021 was 2.96%.
"Mortgage rates have come down since peaking in mid-November, so home sales may be close to reaching the bottom in the current housing cycle," Yun said.
Realtor.com's Market Trends Report in October shows that the largest year-over-year median list price growth occurred in Milwaukee (+34.5%), Miami (+25.1%), and Kansas City (+21.4%). Phoenix reported the highest increase in the share of homes that had prices reduced compared to last year (+35.9 percentage points), followed by Austin, Texas (+31.2 percentage points), and Las Vegas (+24.4 percentage points).
Single-family and Condo/Co-op Sales
Single-family home sales fell to a seasonally adjusted annual rate of 3.95 million in October, down 6.4% from 4.22 million in September and down 28.2% from a year earlier. The median existing single-family home price was $384,900 in October, up 6.2% from last year.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 480,000 units in October, down 2% from September and 30.4% from the previous year. The median existing condo price was $331,000 in October, an annual increase of 10.1%.
Regional Breakdown
Existing-home sales in the Northeast fell 6.6% from September to an annual rate of 570,000 in October, a decline of 23% year over year. The median price in the Northeast was $408,700, up 8% from a year earlier.
Existing-home sales in the Midwest retracted 5.3% from the previous month to an annual rate of 1.08 million in October, down 25.5% from the prior year. The median price in the Midwest was $274,500, up 5.9% from October 2021.
In the South, existing-home sales declined 4.8% in October from September to an annual rate of 1.98 million, a 27.2% decrease from this time last year. The median price in the South was $346,300, an increase of 8% from one year ago.
Existing-home sales in the West waned 9.1% from September to an annual rate of 800,000 in October, down 37.5% from one year ago. The median price in the West was $588,400, a 5.3% increase from October 2021.
The National Association of Realtors is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
