The nation’s housing market saw a modest increase in activity last month, as existing-home sales rose by 1.2% in October compared to September, reaching a seasonally adjusted annual rate of 4.10 million, according to the latest report from the National Association of REALTORS (NAR).
The increase marks the second straight month of gains and comes as homebuyers capitalized on slightly lower mortgage rates, despite a temporary government shutdown. Sales were also up 1.7% year-over-year.
NAR Chief Economist Lawrence Yun attributed the uptick in sales to the improving interest rate environment. “Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates,” Yun said. The average 30-year fixed-rate mortgage fell to 6.25% in October, down from 6.35% the prior month.
Median Price Rises: The median existing-home sales price for all housing types hit $415,200, a 2.1% increase from a year ago. This marks the 28th consecutive month of year-over-year price gains, continuing to build household wealth for current homeowners.
Inventory Tightens: Total housing inventory decreased by 0.7% month-over-month to 1.52 million units, which represents a 4.4-month supply at the current sales pace. This is down from 4.5 months in September, indicating a slight tightening of the market.
First-Time Buyers Rebound: The share of first-time homebuyers rose to 32% of sales, up from 30% in September and 27% a year ago, suggesting that lower rates are helping more new buyers enter the market.
The national figures mask significant regional variations in sales performance and affordability challenges.
| Region | MoM Sales Change | YoY Sales Change | Median Price | YoY Price Change |
| Midwest | $\uarr$ 5.3% | $\uarr$ 2.1% | $319,500 | $\uarr$ 4.6% |
| South | $\uarr$ 0.5% | $\uarr$ 2.8% | $362,300 | $\uarr$ 0.3% |
| Northeast | No Change | $\uarr$ 4.3% | $503,700 | $\uarr$ 6.5% |
| West | $\downarrow$ 1.3% | $\downarrow$ 2.6% | $628,500 | $\uarr$ 0.1% |
While the Midwest and South saw sales increases, the West experienced a month-over-month decline of 1.3%, coupled with the highest median price at $628,500.
“First-time homebuyers are facing headwinds in the Northeast due to a lack of supply and in the West because of high home prices,” Yun noted. The Midwest and South, with their “plentiful supply of affordable houses” and “sufficient inventory,” respectively, offered better conditions for new entrants.
Looking ahead, Yun anticipates further improvements in the housing market, citing external economic factors. The deceleration of rents is expected to curb inflation, encouraging the Federal Reserve to continue cutting rates.
“This will help bring more homebuyers into the market since the Fed rate has an indirect impact on mortgage rates,” Yun concluded. A sustained downward trend in mortgage rates could further alleviate affordability concerns and boost sales activity in the final months of the year.
READ: U.S. Employers Add 119,000 Jobs In September, Surpassing Forecasts Post-Shutdown
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