Home Sales Surge in October Ahead of Rate Hikes
In October 2024, U.S. existing home sales rose by 3.4% from September, reaching an annualized rate of 3.96 million units, marking the first year-over-year increase since July 2021. This uptick is attributed to a slight rise in housing inventory, which provided more options for buyers despite persistently high mortgage rates.
The national median home price increased by 4% year-over-year to $407,200, continuing a 16-month trend of annual price gains. Inventory levels reached 1.37 million homes in October, up from the previous year but still below pre-pandemic figures. Homes typically remained on the market for 29 days, longer than the 23 days observed a year earlier.
First-time buyers accounted for 27% of sales, below the historical average of 40%, indicating ongoing affordability challenges. All-cash transactions made up 27% of sales, down from 29% the previous year. Distressed sales, including foreclosures, remained low at 2% of transactions.
The average rate for a 30-year fixed-rate mortgage was 6.78% last week, up from 6.08% in September. While the Federal Reserve has cut interest rates recently, mortgage rates have risen due to higher U.S. Treasury yields and economic uncertainties. The future trajectory of the housing market will depend on mortgage rate trends and economic factors, including potential inflation impacts from political developments.
Overall, the October data suggests a potential stabilization in the housing market, with increased inventory and sales activity offering a positive outlook amid ongoing economic challenges.
