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Existing-Home Sales Decline, Market Continues to Improve

by Peter Thomas Ricci

Homes sales were down in October, but the overall picture remains a very positive one for housing

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Existing-home sales declined 3.4 percent from September to October to a seasonally adjusted annual rate of 5.36 million, according to the latest report from the National Association of Realtors.

Despite that increase, the overall picture of home sales in 2015 remains a very positive one. Sales were still up 3.9 percent year-over-year, and they are currently on pace for their best year since 2006; furthermore, October’s decline was mainly because of the falling share of distressed sales, which are down 36 percent.

Existing-Home Sales in October

Other notable details from NAR’s report included:

  • The median existing-home price for all housing types in October was $219,600, which is 5.8 percent above October 2014 ($207,500). October’s price increase marks the 44th consecutive month of year-over-year gains.
  • Total housing inventory at the end of October decreased 2.3 percent to 2.14 million existing homes available for sale, and is now 4.5 percent lower than a year ago (2.24 million). Unsold inventory is at a 4.8-month supply at the current sales pace, up from 4.7 months in September.
  • The percent share of first-time buyers increased to 31 percent in October, up from 29 percent both in September and a year ago. NAR’s annual Profile of Home Buyers and Sellers found that the annual share of first-time buyers fell to its second-lowest level since the survey began in 1981.
  • All-cash sales were 24 percent of transactions in October (unchanged from September) and are down from 27 percent a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in October, unchanged from September but down from 15 percent a year ago. Sixty-two percent of investors paid cash in October.
  • Distressed sales, as referenced earlier, declined to 6 percent in October, which is the lowest since NAR began tracking in October 2008.

Regional Breakdown

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.

Meanwhile, 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.

Finally, 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.

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