Real estate broker Rebecca Van Camp will place a “sold” placard on the sign in front of the house in Meridian, Idaho, on Wednesday, October 21, 2020.
Darling Oswald | Tribunnews Services | Getty Images
According to the National Association of Real Estate Agents, pre-owned home sales in October increased 0.8% to a seasonally adjusted annual rate of 6.34 million units. Sales were down 5.8% from October 2020. Last October was a periodic high in the market.
This indicator represents the closing of existing single-family homes and condominiums in October, and may have been signed in August and September. The closing process can take an average of 1-2 months.
Realtors currently forecast full-year sales of over 6 million. This is the highest sales since 2006.
Lawrence Yun, Chief Economist at the National Association of Realtors, said:
Yun also pointed out an increase in investors in the market, probably due to soaring rents in single-family homes. Investors accounted for 17% of buyers in October, up from 13% in September 2020 and 14% in October. All cash buyers accounted for 24% of buyers. Most investors use all cash.
First-time buyers accounted for 29% of sales, compared to 32% a year ago. Historically, its share is about 40%.
The supply of existing homes for sale continued to weaken. As of the end of October, 1.25 million homes were available for sale, down 12% from a year ago. This is equivalent to a 2.4 month supply at the current sales pace. A 5-6 month supply is considered a balanced market between buyers and sellers.
Weak supply and strong demand brought the median existing home to $ 353,900. This is 13.1% higher than in October 2020.
By price category, home sales for less than $ 250,000 were down 24% year-over-year. Sales of homes priced between $ 750,000 and $ 1 million increased by 25%. Home sales of over $ 1 million increased 31%.
October buyers did not get a break from mortgage rates. It rose steadily from early August to September. According to Mortgage News Daily, the average interest rate on popular 30-year fixed loans was 2.78% on August 3. By October 29th it was 3.22%. Last Friday’s rate was 3.16%.
The latest readings on new home sales from September showed a 14% surge from August. Builders continue to see strong demand due to the low supply of existing homes for sale. However, some of the largest domestic builders say sales are slowing due to supply chain and labor issues. They are worried that they may not be able to deliver their homes on time.
Home sales increased in October as investors rushed into the market
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