Existing home sales hit 9-month high level

Sales of previously owned U.S. homes rose unexpectedly in October to the highest level since the start of the year, pointing to healthy demand as more buyers take advantage of stronger job growth and low mortgage rates.

Contract closings increased 0.8 percent from the prior month to an annualized 6.34 million, figures from the National Association of Realtors showed Monday. The median forecast in a Bloomberg survey of economists called for a 6.2 million pace in October.

While the monthly pace of sales has settled back after reaching a 14year high a year ago, they remain well above pre-pandemic levels. Sales are on track to exceed 6 million this year, which would be the strongest since 2006.

“Inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment,” Lawrence Yun, NAR’S chief economist, said in a statement.

The median selling price rose more than 13 percent in October from a year ago to $353,900. That compares with $351,200 in the prior month.

There were 1.25 million homes for sale last month, down 12 percent from a year ago. At the current pace it would take 2.4 months to sell all the homes on the market. Realtors see anything below five months of supply as a sign of a tight market.

Properties remained on the market for an average of 18 days last month, compared to 21 days a year ago. All-cash sales accounted for 24 percent of all transactions in October.

Investors, who make up many of cash sales, comprised 17 percent of October contract signings. That compares with 13 percent in September and 14 percent a year earlier. The gain in October purchases reflected stronger results in the upper-end market, whereas sales for cheaper properties were restrained because of a lack of inventory.