Existing home sales in the US were — how should I put this? — very slow in October, data released on Thursday showed.
But we’re talking about a market where anything that’s not “record bad,” so to speak, counts as “good.” Measured against that yardstick, the 4.1 million pace reported by the NAR for last month was good news.
Technically, the index now sits at an eight-month high, but like “good,” “high” is an extremely relative term in this context.
The 1.2% MoM gain on the gauge was the second straight and the third in four.
“Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates,” NAR Chief Economist Lawrence Yun said.
Recall that the average 30-year fixed slid to a 13-month low last month, and according to Redfin, sellers outnumber buyers by around half a million.
The figure above’s updated with the latest data. Sellers outnumbered buyers by a record 37% in October, when the number of buyers fell to the lowest ever excluding the weeks around the onset of the pandemic.
Data released earlier this week suggested more than four in 10 builders cut prices this month and two thirds are offering some manner of incentives. So, if you can make the math work, this is a good time to stick your foot in the door.
The problem, as ever, is that despite i) rates that are down ~75bps from the 2025 highs, ii) more inventory and iii) desperation on the part of some sellers and a lot of builders, homeownership remains a prohibitively expensive proposition for too many American renters.
As Redfin’s Lily Katz put it this week, “Of course, it’s only a buyer’s market for those who can afford to buy [and] many Americans have been priced out of the housing market as affordability has eroded.”
The median existing home price in the NAR release — $415,200 — rose both on a MoM and YoY basis. October marked the 28th consecutive month of annual price increases.
As the figure reminds you: That run of YoY gains is on top of the historic post-pandemic price surge. The YoY declines seen in early 2023 were fleeting and shallow.
Yun offered an upbeat assessment, as is his wont. “Rents are decelerating which will reduce inflation and encourage the Fed to continue cutting rates and pulling back their quantitative tightening,” he said Thursday. “This will help bring more homebuyers into the market since the Fed rate has an indirect impact on mortgage rates.”
He did concede what I’ve argued for years: It’s going to take five-handle mortgage rates to get things moving in earnest. In the same remarks, Yun said supply, despite recent improvements, needs to increase “drastically” for sales to have any hope of reclaiming the pace observed prior to the pandemic.
