Existing-home sales continue to climb
Marking the fifth consecutive month of growth, existing-home sales grew 4.3% to a seasonally adjusted annual rate of 6.85 million in October—a 26.6% increase from last year.
“Considering that we remain in a period of stubbornly high unemployment relative to pre-pandemic levels, the housing sector has performed remarkably well this year,” says National Association of Realtors®(NAR’s) chief economist, Lawrence Yun.
Yun remains hopeful for the housing market’s future, predicting existing-home sales to increase by 10% to 6 million in 2021. “The surge in sales in recent months has now offset the spring market losses,” he says. “With news that a COVID-19 vaccine will soon be available, and with mortgage rates projected to hover around 3% in 2021, I expect the market’s growth to continue into 2021.”
Existing-home prices continue to increase as well, with October marking the 104th straight month of year-over-year gains. October brought price increases in all four major regions with the median existing-home price up 15.5% from last year.
Meanwhile, total housing inventory was down 2.7% from last month and 19.8% from last year. At the current sales pace, unsold inventory sits at an all-time low—enough to last 2.5 months.
Hopeful for housing option expansions
“Homebuilders’ confidence has soared even though the actual production has not,” says Yun. “All measures, such as reduction to lumber tariffs and expansion of vocational training, need to be considered to significantly boost supply and construct new housing.”
Yun explains that expanding inventory would help offset higher costs—improving market affordability. NAR’s quarterly Metropolitan Area Prices and Affordability report showed existing-home prices increased in all 181 metropolitan areas measured, with 65% of those metros showing double-digit price increases.
In October, properties typically remained on the market for 21 days in comparison to 36 days in October of 2019, as 72% of homes sold were on the market for less than a month.
“Faced with many uncertainties in 2020, the real estate industry has been able to meet surprisingly strong homebuying demand and help lead our country’s economic recovery,” says NAR President Charlie Oppler. “As we continue to help consumers secure housing and property, we will also remain vigilant in working to expand housing options, equality and affordability for all who are entering the marketplace.”
Growth across the regions
All four major regions saw both month-over-month and year-over-year growth in existing-home sales, as well as double-digit growth in median home prices.
- Northeast: Up 4.7% to an annual rate of 900,000—30.4% higher than last year
- Midwest: Up 8.6% to an annual rate of 1,640,000—28.1% higher than last year
- South: Up 3.2% to an annual rate of 2,910,000—26.5% higher than last year
- West: Up 1.4% to an annual rate of 1,400,000—22.8% higher than last year
Median home prices:
- Northeast: $356,500—up 20.2% from last year
- Midwest: $243,500—up 16.7% from last year
- South: $272,500—up 15.7% from last year
- West: $467,800—up 15.1% from last year