U.S. Home Sales Climb in October, Marking First Annual Gain in Three Years

Sales of previously owned homes in the U.S. saw a notable rise in October, marking the first annual increase in more than three years. Encouraged by lower mortgage rates and an uptick in available inventory, homebuyers helped boost the housing market.

According to the National Association of Realtors (NAR), existing home sales climbed 3.4% from September, reaching a seasonally adjusted annual rate of 3.96 million, matching the pace set in July. Sales also rose 2.9% compared to October 2022, the first year-over-year increase since July 2021. The results slightly exceeded economists’ expectations of a 3.93 million annual pace, as per FactSet.

Home prices continued their upward trajectory, with the national median sales price increasing 4% year-over-year to $407,200 in October. This marked the 16th consecutive month of annual price growth.

Lawrence Yun, NAR's chief economist, noted, “The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions.”

Inventory levels improved, with 1.37 million unsold homes on the market at the end of October—a 0.7% rise from September and a 19% increase from a year earlier. This equates to a 4.2-month supply at the current sales pace, up from 3.6 months in October 2022. A balanced market typically requires a supply of five to six months.

Despite October's improvement, existing home sales are on track to hit their lowest annual total since 1995, Yun noted, with just two months remaining in the year.

The housing market has faced challenges since 2022 as mortgage rates climbed from pandemic-era lows. Sales hit a near 30-year low last year, driven by the average rate on a 30-year mortgage soaring to a 23-year high of nearly 8%, according to Freddie Mac.

In September, the average 30-year mortgage rate dipped to a two-year low of 6.08%, aligning with the period when many of the purchase contracts for October sales were signed. However, rates have since risen, reaching 6.78% last week.

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