(Photo: REUTERS)
The National Association of Realtors (NAR) said Tuesday existing home sales rose 2% in October to an annualized rate of 5.60 million units. The median forecast called for an annualized rate of 5.43 million units. The sales pace in October is 5.9% higher (5.29 million) than the previous year and topped the pace in June (5.57 million) as the highest since February 2007 (5.79 million).
“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,” Lawrence Yun, NAR chief economist said. “Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes.”
All major regions saw monthly and annual sales increases in October and the median existing-home price for all housing types in October was $232,200, a 6% increase from October 2015 ($219,100). October’s price increase marks the 56th consecutive month of year-over-year gains.
“The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion,” Mr. Yun added. “These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.”
The Northeast saw a 1.4% gain to an annual rate of 750,000, which is 1.4% above a year ago. The median price in the Northeast was $255,500, or 2.9% higher than in October 2015. The Midwest saw sales grow by 2.3% to an annual rate of 1.36 million, or 6.3% above the year prior, while the median price in was $181,500, up 5.8%.
Existing home sales in the South increased 2.8% to an annual rate of 2.22 million, marking a 4.7% rise over October 2015, while the median price in the South was $202,300, or 7.4% higher on the year.
The West gained 0.8% to an annual rate of 1.27 million, making it 10.4% higher than a year ago, while the median price in the West was $345,800, up 7.8% from October 2015.
“To alleviate the cost for borrowers and better reflect the current risk in the marketplace, Realtors® encourage FHA to reduce mortgage insurance premiums and consider eliminating ‘life of loan’ mortgage insurance,” NAR President William E. Brown, a Realtor from Alamo, Calif., said. “These two moves would help the current homeownership rate recover from its near all-time low and give more prospective first-time buyers a more affordable financing option.”
