Steel Markets

Existing-Home Sales Edge Higher in October

Written by David Schollaert

Existing-home sales grew for the second straight month in October, reported the National Association of Realtors. Of the four major U.S. regions, only the Midwest and South regions registered month-over-month gains. The Northeast fell 2.6% while the West held steady. Annually, however, all four regions reported declining sales versus the same year-ago period.

October sales rose 0.8% from September to a seasonally adjusted annual rate of 6.34 million. Total registered sales of 6.73 million were down, though, by 5.8% from a year ago.

“Home sales remain resilient, despite low inventory and increasing affordability challenges,” said Lawrence Yun, NAR’s chief economist. “Inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”

The median existing-home price rose 13.1% from October 2020 to $353,900. All regions posted increased pricing in October, marking the 116th straight month of year-over-year gains.

“Among some of the workforce, there is an ongoing trend of flexibility to work anywhere, and this has contributed to an increase in sales in some parts of the country,” said Yun. “Record-high stock markets and all-time high home prices have worked to significantly raise total consumer wealth and, when coupled with extended remote work flexibility, elevated housing demand in vacation regions.”

Total housing inventory at the end of October slipped 0.8% from September to 1.25 million units, down 12.0% from one year ago. Inventory is at a 2.4-month supply at the current sales pace. Properties averaged 18 days on the market in October, up from 17 days in September, but down 21 days from the same period a year ago.

NAR reports that 82% of homes sold in October were on the market for less than a month. First-time buyers accounted for 29% of sales last month, up from 28% in September but down from 32% year on year.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.07% in October, up from 2.90% in September. The average commitment rate across all of 2020 was 3.11%.

David Schollaert

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