Here’s Why Existing Home Sales Climbed in October

According to the National Association of Realtors, Existing Home Sales rose in October while the number of homes on the market continued to decline. Here’s your Cheat Sheet:

Sales: Came in at an annual rate of 4.97 million in October.

Month-over-Month Change: This is 1.4% above the downwardly revised 4.90 million pace in September 2011.

Year-over-Year Change: This is 13.5% above the 4.38 million pace in October 2010.

Prices: The national median existing-home price of $162,500 in October was down 4.7% from October 2010.

Inventory: Total housing inventory fell 2.2% to 3.33 million existing homes available for sale in October. This represents a supply of 8.0 months at the current sales rate, down from 8.3 months in September.

Noteworthy Stats: First-time buyers purchased 34% of homes in October, up from 32% in September and 32% in October 2010. Investors accounted for 18% of purchase activity in October, down from 19% in September and 19% in October 2010. All-cash transactions accounted for 29% of sales in October, down from 30% in September and unchanged from October 2010. Investors account for the bulk of cash purchases.

Commentary: “Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions. Many people who are attempting to buy homes are thwarted in the process,” said NAR chief economist Lawrence Yun. “A higher rate of contract failures has held back a sales recovery. Contract failures reported by NAR members jumped to 33 percent in October from 18 percent in September, and were only 8 percent a year ago, so we should be seeing stronger sales.”

More Details:

Single-family home sales rose 1.6% to a seasonally adjusted annual rate of 4.38 million in October from 4.31 million in September, and are 13.8% above the 3.85 million pace in October 2010. The median existing single-family home price was $161,100 in October, which is 5.1% below a year ago.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 590,000 in October, but are 10.5% higher than the 534,000-unit level one year ago. The median existing condo price was $160,300 in October, down 1.5% from August 2010.

Regionally, existing-home sales in the Northeast fell 5.1% to an annual pace of 770,000 in October, but are 1.4% above October 2010. The median price in the Northeast was $224,400, down 5.5% from a year ago.

Existing-home sales in the Midwest rose 2.8% in October to a pace of 1.10 million and are 19.6% higher than October 2010. The median price in the Midwest was $132,800, down 4.7% from a year ago.

In the South, existing-home sales rose 2.1% to an annual pace of 1.94 million in October and are 14.1% above a year ago. The median price in the South was $145,700, down 1.6% from a year ago.

Existing-home sales in the West rose 4.4% to an annual pace of 1.19 million in October and are 15.5% higher than October 2010. The median price in the West was $207,500, down 1.6% from a year ago.