October resales of homes dip 5.9%

Median price hits $379,100 in U.S.

Sales of existing U.S. homes have cratered 28.4% from October 2021, falling this year to the slowest prepandemic sales pace in more than 10 years as homebuyers grapple with sharply higher mortgage rates, rising home prices and fewer available properties.

Existing-home sales fell 5.9% last month from September to a seasonally adjusted annual rate of 4.43 million, the National Association of Realtors reported Friday. The string of monthly sales declines this year is the longest on record since 1999, according to the association.

Excluding the steep slowdown in sales that occurred in May 2020, near the start of the covid-19 pandemic, sales are now at the slowest annual pace since December 2011, when the housing market remained mired in a deep slump after the foreclosure crisis of the late 2000s.

Despite the slowdown, however, home prices continued to climb last month, albeit at a slower pace than earlier this year. The national median home price rose 6.6% to $379,100 in October from a year earlier, according to the Realtors association.

The data Friday did not account for individual states. According to data from residential broker Redfin, the median sale price for a single-family

home in Arkansas increased 12.6% to $252,200 in October from a year earlier, down from a nearly 24% peak in year-overyear price growth tallied in June, according to Redfin.

In October 2019, before the pandemic, Arkansas’ median single-family-home price was $176,000, according to the broker. Nationally, the median home price is down about 8% from its June peak, but remains 40% above October 2019, said Lawrence Yun, chief economist for the Realtors association.

“That’s really hurting affordability,” Yun said. “Most household incomes have not risen by 40%.”

Meanwhile, the inventory of homes on the market declined for the third straight month, with about 1.22 million homes for sale by the end of October, down 0.8% from September, according to the association.

That amounts to 3.3-month supply at the current pace. In a more balanced market between buyers and sellers, there is a 5- to 6-month supply.

The housing market has slowed as U.S. mortgage rates have more than doubled from a year ago, shrinking the buying power of Americans. The average rate on a 30-year home loan was 6.61% this week, according to mortgage buyer Freddie Mac. A year ago, the average rate was 3.1%. Late last month, the average rate topped 7% for the first time since 2002.

That can add hundreds of dollars to monthly mortgage payments, and also discourage homeowners who locked in an ultra-low rate during the past two years from buying a new home. It’s part of the reason fewer homes exist on the market.

Mortgage rates are likely to remain a significant hurdle for some time as the Federal Reserve has consistently signaled its intent to keep raising its short-term interest rate in its bid to squash the hottest inflation in decades.

Two weeks ago, the Fed raised its short-term lending rate by three-quarters of a point for a fourth time this year. The central bank’s key rate now stands in a range of 3.75% to 4%.

While mortgage rates don’t necessarily mirror the Fed’s rate increases, they tend to track the yield on the 10-year Treasury note. The yield is influenced by a variety of factors, including expectations for future inflation and global demand for U.S. Treasurys.

With the number of properties on the market scarce, sellers typically receive multiple offers, especially for the most affordable homes.

On average, homes sold within 21 days of hitting the market last month, up from 19 days in September, according to the Realtors association. Before the pandemic, homes typically sold more than 30 days after being listed.

The combination of higher mortgage rates and rising prices are keeping many first-time buyers on the sidelines. They represented 28% of sales last month, down from 29% in September, according to the association.

By historical standards, firsttime buyers typically made up as much as 40% or more of transactions.