It was the slowest sales pace since August 2010. Analysts were expecting a smaller drop, to 3.9 million units. Sales were down 14.6% year-over-year.
The October sales count is based on closings from contracts likely signed in August and September. The average rate on the 30-year fixed mortgage had dropped to near 7% at the end of August, but then began rising sharply, jumping over 8% by mid-October. Rates have since retreated somewhat.
At the end of October there were 1.15 million homes for sale, down 5.7% from a year earlier. This is about half as many homes as were available for sale pre-Covid. At the current sales pace, that represents a 3.6-month supply. a six-month supply is considered a balanced market between buyer and seller.
Tight supply kept pressure under prices. The median price of an existing home sold in October was $391,800, an increase of 3.4% from a year ago ($378,800). Prices rose in all regions of the country. These annual price increases have been getting larger for four straight months. Roughly 28% of homes sold above list price.
Sales fell in all price categories up to $750,000, but there was an increase in sales of higher end homes. Homes priced above $1 million were up just over 9% from a year ago. Wealthier buyers either tend not to use mortgages or are less sensitive to monthly rate changes. Yun also noted that there are more homes available for sale on the higher end of the market.
First-time buyers represented 28% of October sales, unchanged from a year ago and still significantly lower than the 40% share they have represented historically. Individual investors bought 15% of the homes, down from 18% in September and 16% from a year ago. All-cash deals made up 29% of sales, up from 26% in October 2022.
(source:CNBC)
