National Home Sales Continued to Climb in October

For the second straight month, October 2016 existing-home sales continued their climb across in all four regions of the U.S. The sales increase “eclipsed” the sales peak in June to become the highest annualized sales pace in years, according to the National Association of RealtorsⓇ’ (NAR) monthly report.

Existing-Home Sales

Sales rose across the nation to reflect a national 2.0% increase from September. This October’s sales pace is 5.9% above this time last year, surpassing June as the highest pace since February 2007. Existing-home sales in the South increased 2.8% for the month to an annual rate of 2.22 million, now 4.7% above October 2015. Locally, Beverly-Hanks reported in our Q3 Market Report an existing-homes sale increase of 4.4% YOY.

NAR’s chief economist, Lawrence Yun, says this sales activity reflects an autumn revival for the housing market:

“October’s strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply. Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes.”  

Yun added, “The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.”

Existing-home sales, Oct 2015 vs Oct 2016

Median Home Prices

Home prices also continue to climb steadily year over year. The U.S. October median existing-home price for all housing types (single-family homes, townhomes, condominiums, and co-ops) was $232,200, a 6.0% increase from October 2015 ($219,100). October now marks the 56th consecutive month of year-over-year gains.

Regionally, the median price in the South was $202,300, up 7.4% from one year ago. Locally, Beverly-Hanks reported in our Q3 Market Report a median regional sales price of $226,700, up 5.9% from $214,000 in Q3 2015.

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Region

Median Home Price

(Oct. 2016)

Median Price Increase

(Oct. 2015 to Oct. 2016)

U.S.

$232,200

+6.0%

South

$202,300

+7.4%

WNC

$226,700 (Q3)

+5.9% (Q3)

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Median home sales, Oct 2015 vs Oct 2016

Housing Inventory

The tight housing market was reflected in October’s total housing inventory, which declined 0.5% in October. Housing inventory is now at a 4.3% shortfall from October 2015. This is the 17th consecutive month of year-over-year declines in inventory. Properties on the market sold in an average of 41 days during this period. Yun said:

“The ramp-up in housing starts in October is a hopeful sign that overall supply can steadily increase enough to provide more choices for buyers and also moderate price growth. A prolonged continuation of the robust single-family starts pace seen last month would go a long way in giving homeowners much-needed assurance that they can list their home for sale and find a new home to buy within a reasonable timeframe.”

Mortgage Rates

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage inched up again in October. Rates are now 3.47% compared to 3.46% in September. The average commitment rate for all of 2015 was 3.85%.

Yun anticipates that low mortgage rates will continue to entice luxury homebuyers, while lack of inventory in affordable tiers will cause others to delay their home purchase:

“As a result of the anticipated economic stimulus in early 2017, mortgage rates post-election have now surged to around 4 percent as investors expect a strengthening economy and higher inflation. In the short-term, some prospective buyers may rush to lock in their rate and buy now, while others—especially those in higher-priced markets—may be forced to delay as a larger monthly payment outstretches their budget.”

 

Read more about existing-home sales on NAR. Locally, homes sales are mirroring many of the national trends. View the Beverly-Hanks Quarterly Market Report to see how home sales are growing in your community.

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