Existing-home sales fell even more than expected in October and hit a new 13-year low, according to the latest data from the National Association of Realtors.
- M-O-M: Total existing-home sales fell to a seasonally adjusted annual rate of 3.79 million in October, down 4.1% from September and now at the lowest level since August 2010.
- Y-O-Y: Existing home sales are down 14.6% when compared to last year.
Swing & A Miss. Economists where expecting a smaller 1.5% drop to 3.9M.
Supply & Demand Problem. Higher mortgage rates are undoubtedly putting downward pressure on demand but supply is not helping much. While inventory did rise slightly (+1.8%) to 1.15 million units, it is still down almost 6.0% from one year ago when total units were 1.22M.
- Unsold inventory sits at a 3.6-month supply at the current sales pace, up from 3.4 months in September and 3.3 months in October 2022.
Price. The median existing-home price rose to $391,800 in October, an increase of 3.4% from the same time last year. All four U.S. regions registered price increases with the Northeast seeing the biggest median price jump with a 7.5% year-over-year to $439,200 in October.
- The Midwest took the number two spot with the median price rising 4.2% to $285,100 in October followed by the South up 3.5% ($357,700) and the West up 2.3% ($602,200)
First-Timers Holding On. Despite concerns about first-time homebuyers and affordability, October actually saw slightly more first-timers at 28%, up from 27% of sales in September and identical to October 2022.
Cash Is King. All-cash sales accounted for 29% of transactions in October, unchanged from September but up from 26% in October 2022.
Analysis. Lawrence Yun, NAR Chief Economist, said that despite a lot of downward projections for 2023, it has been a good year to be a homeowner. “While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October. In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years.”