Existing-home sales ascended in October for the second straight month and eclipsed June's cyclical sales peak to become the highest annualized pace in nearly a decade, according to the National Association of Realtors. All major regions saw monthly and annual sales increases in October.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew two percent to a seasonally adjusted annual rate of 5.60 million in October, from an upwardly revised 5.49 million in September, the NAR reports. October's sales pace is 5.9 percent above a year ago (5.29 million) and surpasses June's pace (5.57 million) as the highest since February 2007 (5.79 million).
Lawrence Yun, the NAR's chief economist, said the wave of sales activity the last two months represents a convincing autumn revival for the housing market. "October's strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply," he said in a statement. "Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes."
Added Yun, "The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall."
The median existing-home price for all housing types in October was $232,200, up 6.0 percent from October 2015 ($219,100). October's price increase marks the 56th consecutive month of year-over-year gains.
Total housing inventory at the end of October declined 0.5 percent to 2.02 million existing homes available for sale, and is now 4.3 percent lower than a year ago (2.11 million) and has fallen year-over-year for 17 straight months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.4 months in September.
"The ramp-up in housing starts in October is a hopeful sign that overall supply can steadily increase enough to provide more choices for buyers and also moderate price growth," said Yun. "A prolonged continuation of the robust single-family starts pace seen last month (869,000) would go a long way in giving homeowners much-needed assurance that they can list their home for sale and find a new home to buy within a reasonable timeframe."