Home sales rose in October as investors rushed into the market

Rebecca Van Camp, real estate broker, places a placard reading “Sold” on her sign at Meridian, Idaho on Wednesday Oct. 21, 2020.
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According to the National Association of Realtors, October saw a 0.8% increase in sales of homes previously owned. This was an annualized seasonally adjusted rate of 6.34 Million units. They were 5.8% below October 2020. The market’s cyclical peak was October last year.

The October closed sale measure is for single-family and condo homes. It includes contracts signed between August and September. On average, closing can take between one and two months.

Realtors are now anticipating full-year sales exceeding 6 million. This would mark the largest sales increase since 2006.

Lawrence Yun is the chief economist of Realtors. “Sales are very strong, and I would attribute this to continued job additions,” he said.

Yun pointed out that there was an increase of investors on the market due to rising rents for single family homes. Up from 13% September buyers and 14% October 2020 buyers, investors accounted for 17%. 22 percent of October buyers were cash buyers. All cash is preferred by most investors.

29% more sales were made by first-time buyers than 32% one year ago. In the past, this share was around 40%.

The existing home supply continues to decline. At the end October, 1.25 million homes were available to purchase. This is an increase of 12% compared to a year earlier. The current sales pace indicates a 2.4 month supply. An equal market is one that has buyer and seller in supply for 5-6 months.

Strong demand and weak supply drove the median price for an existing home up to $353,900. It is 13.1% lower than the October 2020 average.

The sales of homes under $250,000 have fallen 24% in the price range. The sales of homes between $750,000-$1 million increased 25%. The number of homes worth a million dollars or more was up by 31%

In October, buyers did not receive a reduction in mortgage rates. From August to September, they grew steadily. Mortgage News Daily reported that the August average fixed rate was 2.78%. The rate was now 3.22% as of October 29th. Last Friday’s rate was 3.16

According to the latest report, September saw a 14% increase in sales of new homes compared with August. Because of the limited supply of available homes, builders are still seeing strong demand. However, many of the nation’s largest builders claim they are seeing slower sales as a result of labor and supply chain problems. They fear they won’t be able delivery the homes as planned.

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