October sees 4.1% decline in existing home sales nationwide

While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October,"”

- Lawrence Yun, Chief Economist at NAR

Regional Variations

The October regional analysis of existing home sales shows various trends across the United States.

Northeast:

In the Northeast, sales dropped by 4.0% compared to September, hitting an annual rate of 480,000, marking a significant 15.8% decrease from last October. The median price in this region surged to $439,200, indicating a 7.5% increase from the previous year.

Midwest:

Existing home sales remained steady at an annual rate of 930,000 in October, mirroring the previous month. However, they were down 13.9% compared to a year ago. The median price in the Midwest climbed to $285,100, showing a 4.2% rise from October 2022.

South:

Existing home sales in the South saw a dip of 7.1% from September, reaching an annual rate of 1.69 million in October, marking a decline of 14.6% from the previous year. The median price in this region increased to $357,700, indicating a 3.5% rise from the prior year.

West:

Existing home sales in the West fell by 1.4% from the previous month, totaling an annual rate of 690,000 in October, down 14.8% from the same period last year. The median price in the West rose to $602,200, displaying a 2.3% increase from October 2022.

Recent statistics released by the National Association of Realtors® have unveiled a 4.1% decrease in existing home sales for October. This decline in sales activity reflects a broader trend experienced across all four major U.S. regions, with the Northeast, South, and West regions witnessing a drop while the Midwest remained unchanged. These figures mirror a consistent year-over-year decline in sales across the board.

The total number of existing home sales, encompassing completed transactions spanning single-family homes, townhomes, condominiums, and co-ops, plummeted by 4.1% in October, settling at a seasonally adjusted annual rate of 3.79 million. Compared to October 2022, this marks a substantial 14.6% decrease from the previously recorded 4.44 million sales.

Chief Economist at NAR, Lawrence Yun, highlighted the persisting challenges faced by potential homebuyers. "Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation," Yun stated. “Multiple offers, however, are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market.”

The inventory of unsold existing homes registered a 1.8% increase from September, reaching 1.15 million units by the end of October. However, despite this increase, it reflects a 5.7% drop from the inventory recorded one year ago (1.22 million units). At the current sales pace, the unsold inventory equates to a 3.6-month supply, slightly up from 3.4 months in September and 3.3 months in October 2022.

In terms of pricing, the median existing home sales price for all housing types surged to $391,800, marking a 3.4% uptick from October 2022 ($378,800). This consistent rise in prices has been observed across all four U.S. regions.

Yun also emphasized the beneficial position of home sellers amidst these market conditions. "While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October," he said. "In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years."

The Realtors® Confidence Index showed that properties typically lingered on the market for 23 days in October, slightly up from both September 2023 and October 2022. An impressive 66% of homes were sold in less than a month.

First-time buyers accounted for 28% of sales in October, mirroring September's figures and remaining consistent with the previous year. The annual share of first-time buyers, according to NAR's 2023 Profile of Home Buyers and Sellers, stands at 32%.

Cash sales remained at 29% of transactions, while individual investors or second-home buyers, comprising many cash sales, acquired 15% of homes in October, down from the previous month and year.

Distressed sales, such as foreclosures and short sales, held steady at 2% of total sales in October, showing negligible change from last month and the previous year.

Freddie Mac reported that the 30-year fixed-rate mortgage averaged 7.44% as of November 16, marking a decline from the previous week but a notable increase from one year ago.

Breaking down property types, single-family home sales plummeted to a seasonally adjusted annual rate of 3.38 million in October, marking a 4.2% decrease from both September and the previous year. The median price for existing single-family homes stood at $396,100, reflecting a 3.0% increase from October 2022.

Conversely, existing condominium and co-op sales recorded a seasonally adjusted annual rate of 410,000 units in October, representing a 2.4% decrease from September and a substantial 14.6% drop from one year ago. The median price for existing condos rose to $356,000 in October, up 7.6% from the previous year ($331,000).

Yun concluded with an optimistic outlook, suggesting the potential for improved housing inventory after the winter, leading into the spring season. "More inventory will result in more home sales," he stated, signaling a potential shift in market dynamics in the upcoming months.