Mortgage rates are still below 4 percent but the low financing rates aren’t luring more buyers this fall. All four major regions of the U.S. saw a decrease in existing-home sales in October, according to the National Association of REALTORS®’ latest housing report. Regional Snapshot Here are existing-home sales fared in October across the country:
Existing-home sales – which are completed transactions for single-family homes, townhomes, condos, and co-ops – dropped 3.4 percent to a seasonally adjusted annual rate of 5.36 million in October. Despite the drop, sales are still nearly 4 percent above a year ago, when sales were at 5.16 million.
“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,” says Lawrence Yun, NAR’s chief economist.
“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. As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago.”
Here’s a closer look at the numbers behind NAR’s latest housing report for October sales:
1. Home prices: The median existing-home price for all housing types last month was $219,600, which is 5.8 percent above a year ago. Last month marks the 44th consecutive month of year-over-year price gains.
2. Housing inventory: Total housing inventory at the end of last month fell 2.3 percent to 2.14 million existing homes for-sale. Inventories are now 4.5 percent lower than a year ago. Unsold inventory is at a 4.8-month supply at the current sales pace.
3. Distressed sales: Foreclosures and short sales dropped to 6 percent in October, the lowest since NAR began tracking such data in 2008. Last year, distressed sales comprised 9 percent of the market share. In October, 5 percent of sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value while short sales were discounted on average 8 percent.
4. Days on the market: Properties typically stayed on the market for an average of 57 days in October, a drop from the 63 days in October 2014. One-third of homes sold in October were on the market for less than a month. Short sales were on the market the longest mount of time at a median of 90 days, while foreclosures sold in an average of 67 days and non-distressed homes took 57 days.
5. All-cash transactions: All-cash sales comprised 24 percent of transactions last month, down from 27 percent a year ago. Individual investors, who account for the bulk of cash sales, purchased 13 percent of homes last month, down from 15 percent a year ago. "All-cash and investor sales are still somewhat elevated historically despite the diminishing number of distressed properties," Yun says.
"With supply already meager at the lower-end of the price range, competition from these buyers only adds to the list of obstacles in the path for first-time buyers trying to reach the market."
Source: National Association of REALTORS®