Sales of existing homes recover in October – NMP

In October, sales of existing homes increased by 1.6% compared to last monthwhat according to a new one Redfin report.

Compared to last year, sales increased by 1.7%, marking the first annual gain since November 2021. And because total sales of existing homes in 2024 are expected to be slightly higher than last year’s 4.09 million, the current market shows signs of resilience.

Total home sales, including both existing and newly built homesrose in October, rising 1.6% month-on-month and 3.4% year-on-year. This represents the highest sales level in more than 18 months, seasonally adjusted.

Median prices and buyer activity

The average home sales price rose 5.2% in October from last year to $435,313, the biggest annual gain in six months.

This sales growth was caused by a decline in sales mortgage interestwhich hit a two-year low in September, improving purchasing power for buyers. After the Federal Reserve cut its benchmark interest rate on September 18, mortgage rates briefly reached a low of 6.08% in the week ending September 26.

Many buyers secured favorable rates during this period, fueling the increase in pending home sales in September, which translated into completed sales in October.

Challenges ahead: mortgage rates and election uncertainty

Pending sales fell 1.1% month-on-month October when mortgage rates recovered to 6.78%, close to the highest level since July. The rate increase, in combination with surrounding uncertainties the presidential elections and its economic impact hurricanes in the southeastscared off some buyers.

About 53,000 home purchase agreements were canceled in October, representing 15.5% of contracts – the highest cancellation rate in almost a year.

“Buyers were on the sidelines when mortgage rates fell, but now that rates have risen again, business has slowed again,” said Stayce Mayfield, an agent with Redfin Premier in St. Louis. “Some buyers have not locked in their rates and are now facing quotes of 7%, compared to the 6% they expected.”

Recovery of demand after the elections

Encouragingly, Redfin data shows signs of post-election recovery. Buyer demand through Redfin’s platform was 25% higher last weekend compared to the same weekend last year, marking the biggest year-over-year gain since the 2022 recession.

Pending sales rose 3.5% year-over-year in October, the third straight annual gain, signaling momentum in the market despite near-term hurdles.

Market trends and challenges for sellers

It took an average of 41 days for a home to be sold in October, the longest period in October since 2019. Only 35% of homes were under contract within two weeks, compared to 40.4% a year earlier.

Salespeople are increasingly scrutinized price-conscious buyers. Many homes remain unsold due to inflated prices, leading to a build-up of outdated listings. Active listings reached their highest seasonally adjusted level in four years last month.

“Buyers know what they are paying for and want value for their money,” says Cory Kirkland, a Redfin Premier agent in Columbus, OH. “Sellers asking $500,000 for a home they bought for $350,000 in 2020 with no significant upgrades are finding that buyers are unwilling to compromise.”

In October, only 27.7% of homes were sold above the asking price, compared to 31.7% a year earlier and the lowest October share since 2019.