Despite low inventory and increasing affordability concerns, both pending home sales and existing home sales jumped in October, according to the National Association of Realtors (NAR). Though the market remains strong and sales is on pace for its strongest sales in 15 years, higher home prices continue to price out first-time and young buyers.
The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI increased 7.5% from 116.5 to 125.2 in October. On a year-over-year basis, sales were 1.4% lower than a year ago.
Meanwhile, total existing home sales, including single-family homes, townhomes, condominiums and co-ops, rose 0.8% to a seasonally adjusted annual rate of 6.34 million in October, the highest level since January. However, on a year-over-year basis, sales were 5.8% lower than a year ago, the third annual decline since August 2020.
The first-time buyer share fell to 29% in October, up from 28% in September and down from 32% a year ago. The October inventory level declined from 1.26 to 1.25 million units and is still down from 1.42 million units a year ago.
At the current sales rate, October unsold inventory sit at a 2.4-month supply, equal to September supply and down from 2.5-month a year ago. This low level supply of resale homes is good news for home construction.
Homes stayed on the market for an average of just 18 days in October, up from 17 days in September and down from 21 days a year ago. In October, 82% of homes sold were on the market for less than a month.
The October all-cash sales share was 24% of transactions, up from 23% last month and from 19% a year ago.
Tight supply continues to push up home prices. The October median sales price of all existing homes was $353,900, up 13.1% from a year ago, representing the 116th consecutive month of year-over-year increases, the longest-running streak on record. The median existing condominium/co-op price of $296,700 in October was up 8.7% from a year ago.
Geographically, all regions saw a marginal increase or no changes in existing home sales in October except the Northeast, compared to previous month. Sales in the Midwest and South grew 4.2% and 0.4%, while sales in the Northeast fell 2.6% from last month. Sales in the West remained unchanged. On a year-over-year basis, sales declined in all four major regions, ranging from 3.5% in the South to 13.8% in the Northeast.