U.S. Home sales rose 3.4% in October, first yearly gain since July 2021

Existing home sales rose 3.4% in October, marking the first year-over-year increase since July 2021, according to the National Association of Realtors (NAR).

Sales climbed to a seasonally adjusted annual rate of 3.96 million units, up from September's figures and representing a 2.9% increase from October 2023. The upturn was observed across all four major U.S. regions, though the Northeast showed no year-over-year change.

The median existing home price reached $407,200, continuing a 16-month streak of year-over-year gains with a 4.0% increase from October 2023.

NAR Chief Economist Lawrence Yun expressed cautious optimism about the market's direction. "The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions," Yun said. "Additional job gains and continued economic growth appear assured, resulting in growing housing demand."

Housing inventory showed modest growth, with 1.37 million units available at October's end, representing a 0.7% increase from September and a 19.1% rise from the previous year. This translates to a 4.2-month supply at the current sales pace, a slight improvement from last year's 3.6-month supply.

The market continues to present challenges for first-time buyers, who comprised 27% of October sales. This figure, while slightly higher than September's 26%, remains historically low. The NAR's 2024 Profile of Home Buyers and Sellers recently recorded the lowest-ever annual share of first-time buyers at 24%.

Cash transactions accounted for 27% of sales in October, showing a decrease from both the previous month (30%) and year (29%). Individual investors and second-home buyers, who frequently make cash purchases, represented 17% of the market.

Properties typically remained on the market for 29 days in October, longer than both the previous month (28 days) and October 2023 (23 days), indicating a slight cooling in market velocity.

Mortgage rates have shown some moderation, with Freddie Mac reporting a 30-year fixed-rate mortgage average of 6.78% as of November 14, down from 7.44% a year ago.

In the single-family home sector, sales increased 3.5% to a seasonally adjusted annual rate of 3.58 million, with median prices reaching $412,200. The condominium and co-op market saw a 2.7% monthly increase in sales but remained 7.3% below last year's levels.

Yun noted that while price gains continue to build homeowner wealth, market stabilization may be on the horizon. "Additional inventory and more home building activity will help price increases moderate next year," he said.