Scant inventory and stubborn interest rates dragged U.S. home sales to a 13-year low last month, even as tight supply pushed median existing-home prices to new highs for the month, according to a report Tuesday from the National Association of Realtors.
Existing home sales dropped 4.1% in October from the prior month to a seasonally adjusted annual rate of 3.79 million, the report said, the most lethargic pace since August 2010.
Buy/sell, rent/lease residential &
commercials real estate properties.
Year over year, sales sank 14.6%, down from 4.44 million in October 2022. The figures include single-family homes, townhomes, condominiums and co-ops. Prices, though, went in the opposite direction, the report said, reaching an all-time high for the month of October. The median existing-home price for all housing types in October was $391,800, an increase of 3.4% from October 2022 ($378,800)—and the fourth consecutive month of year-over-year price increases.
“While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year over year,” NAR chief economist Lawrence Yun said in a news release. In fact, the NAR report revealed that typical homeowners have accumulated more than $100,000 in housing wealth over the last three years.
Generally speaking, pricier homes are seeing less competition, according to Yun.
More expensive homes “are unique and, therefore, more difficult to match the preferences of buyers. Homes sit on the market longer and require price concessions compared to what the owners thought their homes are worth,” Yun told Mansion Global.
That slowdown isn’t necessarily the case for the very highest echelons of the U.S. luxury housing market. A report earlier this month from Redfin painted a more optimistic picture of the luxury market, which it defines as the top 5% of their respective metro area based on market value. According to Redfin, luxury home prices rose 9% to the highest third-quarter level on record, growing nearly three times faster than non luxury prices.
Paying cash “helped wealthy buyers weather the storm of high mortgage rates,” Redfin senior vice president of real estate operations Jason Aleem said in a statement. Redfin said that 42.5% of luxury homes that sold in the third quarter were purchased in cash, up from 34.6% a year earlier. “Others are choosing to take on a higher rate and refinance later—an expensive option that isn’t feasible for a lot of lower-income consumers. Affluent Americans are still spending big.”
By contrast, 28% of non-luxury homes were paid for in cash, Redfin said.