Despite a prolonged government shutdown that lasted throughout the month, October still saw a slight increase in existing-home sales, according to the latest data from the National Association of Realtors® (NAR).
NAR’s October Existing-Home Sales report found that sales grew 1.2% to a rate of 4.10 million, slightly down from the 1.5% growth seen in September. Sales were also up 1.7% year-over-year, a fall from the 4.1% year-over-year growth seen in September. Additionally, the median existing-home price increased for the 28th consecutive month to $415,200, up 2.1% year-over-year ($406,800).
Single-family sales saw a 0.8% increase to a rate of 3.71 million (up 1.9% year-over-year), and saw a median price of $420,600 (up 2.2% year-over-year). Condo and co-op sales, however, leaped 5.4% to a rate of 390,000 (unchanged year-over-year), and saw a median price of $363,700 (up 0.9% year-over-year).
Housing inventory fell slightly by 0.7% to 1.52 million units, but was still up 10.9% year-over-year. There is now a 4.4-month supply of unsold inventory, down from 4.5 months in September and up from 4.1 months last year.
While the shutdown put a strain on housing market activity, NAR Chief Economist Lawrence Yun said that home sales still increased “due to homebuyers taking advantage of lower mortgage rates.”
Regionally, the Northeast saw no monthly change from a rate of 490,000 (up 4.3% year-over-year), and a median price of $503,700 (up 6.5% year-over-year). The South saw a 0.5% increase to an annual rate of 1.86 million (up 2.8% year-over-year), and a median price of $362,300 (up 0.3% year-over-year).
The West was the only region to see a decrease, with sales down 1.3% to a rate of 760,000—down 2.6% year-over-year. The region also saw a median price of $628,500, up 0.1% year-over-year.
On the other hand, the Midwest saw a jump of 5.3% in sales to a rate of 990,000, up 2.1% year-over-year. The region also saw its median price jump 4.6% year-over-year to $319,500.
“First-time homebuyers are facing headwinds in the Northeast due to a lack of supply and in the West because of high home prices,” explained Yun. “First-time buyers fared better in the Midwest because of the plentiful supply of affordable houses and in the South because there is sufficient inventory.”
Realtor.com® Chief Economist Danielle Hale expanded on Yun’s thoughts, adding that “Although Fannie and Freddie issued guidance giving lenders work-arounds to help keep many home sales on track during the pause in federal activity, some buyers faced delays getting mortgages and closing home sales.
“Realtor.com data showed that in October, shopping activity declined in markets such as Washington, D.C., and others that were the most-exposed to shutdown impacts because of higher concentrations of federal workers,” she continued.
The REALTORS® Confidence Index for October also saw some slight shifts. The median time on the market increased by one day to 34 days (up from 29 days last year). First-time homebuyer accounted for 32% of sales (up from 27% last year), cash sales made up 29% (up from 27% last year), 16% of sales were investors or second-home buyers (down from 17% last year) and 2% of sales were distressed sales (unchanged).
Looking ahead, Yun noted that rents have been “decelerating” as of late, which will “reduce inflation and encourage the Federal Reserve to continue cutting rates and pulling back their quantitative tightening.”
“This will help bring more homebuyers into the market since the Fed rate has an indirect impact on mortgage rates,” he said.
