Existing-home sales rise again in October

Existing-home sales climbed again in October and have now demonstrated an increase of month-over-month gains for five consecutive months.

Total existing-home sales increased 4.3% from September to a seasonally-adjusted rate of 6.85 million, the National Association of Realtors reported today. Year-over-year sales are now up 26.6% compared to the rate of 5.41 million in October 2019.

Sales include completed transactions of single-family homes, townhomes, condos, and co-ops.

Single-family home sales are up 4.1% to a seasonally-adjusted annual rate of 6.12 million in October. This is also a 26.7% increase on a year-over-year basis. The median existing single-family home price was $317,700 in October, up 16% from October 2019.

“Considering that we remain in a period of stubbornly high unemployment relative to pre-pandemic levels, the housing sector has performed remarkably well this year,” said Lawrence Yun, chief economist of the NAR.

Existing condominium and co-op sales were recorded at a seasonally-adjusted annual rate of 730,000 units in October, up 5.8% from September and up 25.9% from one year ago. The median existing condo price was $273,600 in October, an increase of 10.3% from a year ago.

“The surge in sales in recent months has now offset the spring market losses,” Yun said. “With news that a COVID-19 vaccine will soon be available, and with mortgage rates projected to hover around 3% in 2021, I expect the market’s growth to continue into 2021.” 

Yun now forecasts existing-home sales to rise by 10% to 6 million in 2021.

The median existing-home price for all housing types in October was $313,000, up 15.5% from October 2019 ($271,100), as prices increased in every region. October’s national price increase marks 104 straight months of year-over-year gains.

But total housing inventory at the end of October totaled 1.42 million units, down 2.7% from September and down 19.8% from one year ago (1.77 million). Unsold inventory sits at an all-time low 2.5-month supply at the current sales pace, down from 2.7 months in September and down from the 3.9-month figure recorded in October 2019.

“Homebuilders’ confidence has soared even though the actual production has not,” Yun said. “All measures, such as reduction to lumber tariffs and expansion of vocational training, need to be considered to significantly boost supply and construct new housing.”

Properties typically remained on the market for just 21 days in October, seasonally even with September and down from 36 days in October 2019. About 72% percent of homes sold in October 2020 were on the market for less than a month, the NAR said.

Here’s how existing-home sales break down by region:

• In the Northeast, sales climbed 4.7%, recording an annual rate of 900,000, a 30.4% increase from a year ago. The median price in the Northeast was $356,500, up 20.2% from October 2019.
• Existing-home sales jumped 8.6% in the Midwest to an annual rate of 1,640,000 in October, up 28.1% from a year ago. The median price in the Midwest was $243,500, a 16.7% increase from October 2019.
• Sales in the South increased 3.2% to an annual rate of 2.91 million in October, up 26.5% from the same time one year ago. The median price in the South was $272,500, a 15.7% increase from a year ago.
• Existing-home sales in the West inched up 1.4% to an annual rate of 1,400,000 in October, an 22.8% increase from a year ago. The median price in the West was $467,800, up 15.1% from October 2019.

The complete October 2020 Existing-Home Sales Report from the NAR is available here.