Existing home sales rose in October after a drop in September. However, sales were not up in all regions, with the South and Midwest increasing and the West and Northeast falling. Prices rose yet again, continuing a trend that began in 2012. The October 2019 Housing Market Recap also shows days on the market rose, while inventory fell both month-to-month and year-over-year. An increase in new housing permits has created cautious optimism that inventory may increase.
October existing home sales rose 1.9 percent from September, and 4.6 percent compared to October 2018, according to the National Association of Realtors® (NAR) October Existing Home Sales Report, released November 21st.
Home prices rose again.
The median price of existing homes sold in October was $270,900, an increase of 6.2 percent from October 2018 ($255,100). We’ve now reached 92 consecutive months of year-over-year increases.
Days on the market
Days on the market (DOM) increased compared to September, moving from 32 to 36. This mirrors DOM in October 2018. Another way to look at this is that 46 percent of homes were listed and sold within a month. Buyers aren’t wasting any time choosing and closing on their new homes.
Inventory fell 2.7 percent compared to September, and 4.3 percent year-over-year. At the current sales rate, the supply of unsold inventory was 3.9 months, down from 4.3 months a year ago. (NAR considers 6 months of inventory a balanced market.)
NAR chief economist Lawrence Yun was encouraged by the increase in sales. “Historically-low interest rates, continuing job expansion, higher weekly earnings and low mortgage rates are undoubtedly contributing to these higher numbers,” said Yun. “We will likely continue to see sales climb as long as potential buyers are presented with an adequate supply of inventory.” He also commented on the positive effect of the increase in new housing permits. “The issuance of more housing permits is a very positive sign and a good step toward more inventory,” said Yun, citing the latest data for housing starts. “In order to better counter and even slow the increase in housing prices, home builders will have to bring additional homes on the market.”
Sales mixed across regions.
Comparing October to September, sales rose 4.4 percent in the South and 1.6 percent in the Midwest, but fell 0.9 percent in the West and 1.4 percent in the Northeast. The West led increases in year-over-year median home prices, rising 7.8 percent, followed by the Midwest at 6.7 percent, the South at 6.0 percent, and the Northeast at 5.7 percent.
The NAR market hotness report reflects supply and demand by comparing median days on the market (supply) and listing views per property (demand). Fort Wayne, IN tops the list for the fourth month in a row. The rest of the October top ten are Pueblo, CO, Columbus, OH, Rochester, NY, Colorado Springs, CO, Lafayette-West Lafayette, IN, Janesville-Beloit, WI, Burlington, NC, Springfield, OH, and Topeka, KS.
We’re moving into the time of year when sales traditionally slow down. Surprisingly, there may be advantages for buyers and sellers, depending on the specific circumstances. Buyers may find that sellers are more eager to sell. Sellers may find that buyers are more serious. Both buyers and sellers may benefit from a lack of competition: sellers from fewer homes on the market, buyers from fewer competing offers. The market is still moving quickly, so if you’re a buyer, make sure you’re ready to make an offer by talking to a First Choice Loan Services Inc. mortgage loan originator before you start looking.