October Home Sales Jump
Home sales gain speed in October signaling positive economic growth.
Home sales pushed higher in October as the nation’s economy continued to shine.
The National Association of Realtors (NAR) reported that sales of existing homes rose 5.9% during the month compared with 12 months earlier, to an annualized pace of 5.6 million homes. That was the highest total of monthly home sales in nearly 10 years.
The data followed positive government reports on employment, earnings and production. Simply put, more Americans are working and workers are making more money, enabling more of them to buy homes.
“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,” said NAR’s chief economist, Lawrence Yun. “Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes.”
The NAR economist credited the positive report to the improving conditions for America’s working people. “The tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion,” he said. “These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.”
Supply remains short, but new construction rises
The release reported that supplies of homes for sale continue to fall short of demand. There were over 2 million homes for sale at the end of the month.
Yun did see hopeful signs that the nation’s home builders were reacting to the shortfalls. The National Association of Home Builders reported a 25% jump in new construction last month. If it continues, that spate of new homes could go a long way to balancing out the market going forward.
Prices keep going up
An uptick in mortgage rates could eventually put a crimp in home prices as buyers factor in the increases in their monthly mortgage payments in their purchases. But for now, price gains remain the norm around the nation. Homes sold for a median of $232,200 in October. That marked the 56th consecutive month of year-over-year increases.
In the Northeast, sales were relatively flat last month, growing only 1.4% compared with September and the same 1.4% compared with a year earlier. The West region reported a modest 0.8% month-over-month gain but double-digit growth year-over-year. The South recorded the highest sales total with a annualized rate of more than 2 million, a 2.8% rise from September. And the Midwest recorded 2.3% growth over the month before.
Here are October year-over-year sales changes by region:
|Region||Home sales||% Sales change year-over-year||Median home price||% Price change year-over-year|
Source: National Association of Realtors