After tumbling over the past few months, existing-home sales are giving real estate and mortgage professionals a reason to smile. The seasonally adjusted annual rate of existing-home sales rose 3.4% month over month in October to 3.96 million, according to data released Thursday by the National Association of Realtors (NAR).
This also was a 2.9% year-over-year improvement, marking the first annualized increase since July 2021.
“The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions,” NAR chief economist Lawrence Yun said in a statement. “Additional job gains and continued economic growth appear assured, resulting in growing housing demand. However, for most first-time homebuyers, mortgage financing is critically important. While mortgage rates remain elevated, they are expected to stabilize.”
The pace of existing-home sales rose month over month in all four regions tracked by NAR. The Midwest posting the largest monthly gain at 6.7% to an annualized rate of 950,000. On an annual basis, sales were up 1.1% in the Midwest. The South (up 2.3% to a pace of 1.77 million), the West (up 8.5% to a pace of 770,000) also saw yearly basis. The Northeast posted a 2.2% monthly increase for a pace of 470,000 sales, which was flat compared to October 2023.
The monthly and yearly gains came despite a 4% annual increase in the median sales price, which stood at $407,200 in October. This marked the 16th consecutive month of year-over-year sales-price increases.
Agents and consumers also have reason to celebrate due to rising inventory levels. At the end of October, the number of unsold homes rose 0.7% from September and totaled 1.37 million, representing 4.2 months of supply at the current sales pace. Inventory was up 19.1% year over year.
“The ongoing price gains mean increasing wealth for homeowners nationwide,” Yun added. “Additional inventory and more home building activity will help price increases moderate next year.”
While the sales pace of existing homes improved in October, properties typically remained on the market for 29 days, up from 28 days in September and 23 days a year ago.
The share of first-time buyers rose slightly to 27% in October, up from 26% a month before, but down from 28% in October 2023. Individual investors purchased 17% of homes sold in October, up from 16% a month ago and 15% a year ago.
NAR also found that the share of all-cash sales dropped to 27%, compared to 30% in September 2024 and 29% in October 2023.
