The National Association of Realtors (NAR) released their Existing Home Sales report last week and it showed that existing home sales rose 0.8% for the month of October. This marks the second consecutive month of positive sales. Even though there were 6.34 million sales in October, existing sales are still down from a year ago by 5.8%…but don’t forget this comparison is to 2020 sales which were very strong. Existing single-family homes rose 1.3% in October and are up 13.5% year over year.
“Home sales remain resilient, despite low inventory and increasing affordability challenges,” said Lawrence Yun, NAR’s chief economist. “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.”
When looking at this report, you can really see the resiliency in homebuyer demand as Larry states, for instance sales are at strong levels even amongst a housing inventory that is 12% lower than where it was a year ago in October. There were 1.25 million units for sale in October 2021 versus 1.42 million units in October 2020.
The median existing house price, which is the price of homes that sold right in the middle of the selling range, rose 13.1% year over year from $313,000 to $353,900. This increase marks the 116th straight month of year over year gains which is the longest running streak on record.
Properties remained on the market for about 18 days in October 2021 versus 21 days in 2020. And, 81% of homes sold in October 2021 were on the market for less than a month!
NAR President Leslie Rouda Smith said it best when she said, “At a time when mortgage rates are still low, buying and securing a home is a wise investment.”
Again, with low interest rates and tight inventory levels, it is still a great time to invest in a home. Many research firms and analysts are saying there will be a tempering of the rate of home appreciation and not a depreciation of the values of homes in 2022.
By: Jon Iacono