Existing home sales take biggest hit of the year
October home sales slid 4.1%, representing the steepest single-month decline in 2023 so far.
Key points:
- The seasonally adjusted annual rate for home sales in October was 3.79 million, NAR reported.
- This is the slowest pace of home sales in over 13 years, Realtor.com’s chief economist noted.
- Following this slump, “there really is nowhere to go but up in 2024,” said Selma Hepp, chief economist at CoreLogic.
Existing home sales have fallen yet again. According to NAR data, sales of all existing home types — detached homes, condos and townhouses — fell in October by 4.1%, which was the biggest month-over-month decline in home sales this year.
The decline reflects a downward trend seen throughout 2023. There have only been two months this year — February and May — where home sales posted a gain over the previous month.
The seasonally adjusted annual rate for existing home sales in October was 3.79 million, which was well below typical figures. When compared to the same period last year, sales were down 14.6% from the seasonally adjusted annual rate of 4.44 million home sales, NAR reported.
In September, annual existing home sales fell below 4 million for the first time in 13 years.
The October median existing home price also fell from previous months to $391,800. This figure was $394,300 in September and $407,100 in August. However, compared to the same period a year ago, the median existing home price was up 3.4% from $378,800.
Low inventory and high borrowing costs remain major obstacles for buyers, economists noted, though the market still appears to be strong for sellers.
"While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October," NAR chief economist Lawrence Yun said in the report. "Multiple offers are still occurring, especially on starter and mid-priced homes."
But the home price gains won't last forever, said Danielle Hale, chief economist at Realtor.com, who also noted that the sluggish pace of existing home sales hasn't been this bad since August 2010.
"Although they are less common than one year ago, price reductions rose unseasonably in October, which could portend some weakening in home price gains in the months ahead," she noted. "As down payments hit a new high in the third quarter, the stakes for today's home shoppers are high."
CoreLogic Chief Economist Dr. Selma Hepp sees some optimism for buyers in the near-term, however.
"Recent CoreLogic transaction data suggests that existing home sales are leveling off despite the recent surge in rates. At the same time, existing inventory also appears to have bottomed out and new listings are keeping steady despite the usual seasonal decline," she said.
"Together, the two may suggest that there really is nowhere to go but up in 2024."