Although not a dramatic dip, home sales did slip 3.4 percent in October, according to the National Association of Realtors (NAR), with all regions failing to see any gains.
Existing home sales (completed transactions) fell to a seasonally adjusted annual rate of 5.36 million from a slightly downwardly revised 5.5 million in September.
NAR is quick to point out that sales are still up 3.9 percent compared to October of last year.
Why the dip?
Dr. Lawrence Yun, NAR chief economist, says a sales cooldown in October was likely given the pullback in contract signings the last couple of months.
“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,” he said.
“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.”
Adds Yun, “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.”
Inventory levels continue to tighten
Total housing inventory fell 2.3 percent in October, which is now 4.5 percent lower than a year ago. This is unwelcome news as tight inventory levels remains a top challenge for the real estate industry.
Unsold inventory is at a 4.8-month supply at the current sales pace, up from 4.7 months in September.
Days on market, median price
The median home price hit $219,600 which is up 5.8 percent since last year, and the jump is the 44th month in a row of year-over-year gains.
The average days on market rose to 57 days in October, up from 49 days in September (yikes), but below the 63 days in October 2014.
NAR reports, “Short sales were on the market the longest at a median of 90 days in October, while foreclosures sold in 67 days and non-distressed homes took 57 days. One-third of homes sold in October were on the market for less than a month.”
Regional performance varied
Although no region saw an improvement in sales compared to September, they’re all better than last October.
- October existing-home sales in the Northeast were at an annual rate of 760,000, unchanged from September and 8.6 percent above a year ago. The median price in the Northeast was $248,900, which is 1.3 percent above October 2014.
- In the Midwest, existing-home sales declined 0.8 percent to an annual rate of 1.30 million in October, but are 8.3 percent above October 2014. The median price in the Midwest was $172,300, up 5.7 percent from a year ago.
- Existing-home sales in the South decreased 3.2 percent to an annual rate of 2.14 million in October, but are still 0.5 percent above October 2014. The median price in the South was $188,800, up 6.2 percent from a year ago.
- Existing-home sales in the West fell 8.7 percent to an annual rate of 1.16 million in October, but are still 2.7 percent above a year ago. The median price in the West was $319,000, which is 8.0 percent above October 2014.