ARLINGTON, Va.—Existing home sales increased 1.4% in October.
Though a slight rebound following six months of decline, sales remain constrained due to a lack of affordability, NAFCU Research Assistant Yun Cohen noted in a NAFCU Macro Data Flashreport.
"According to the National Association of Home Builders (NAHB), housing affordability hit a 10-year low during the third quarter as mortgage rates rose," Cohen said. "Foot traffic has slowed lately as more buyers get priced out, and sellers are increasingly forced to cut prices in response. Supply and affordability constraints are expected to weigh on sales for the foreseeable future."
Sales improved in three of the four regions in October. Sales in the West increased 2.8%, followed by the South (+1.9%) and the Northeast (+1.5%). Sales in the Midwest decreased 0.8% during the month.
Based on current sales, there were 4.3 months of supply at the end of October, down from 4.4 months in September. Analysts consider six months of supply to be roughly balanced between supply and demand. Inventory decreased 1.6% in October but was up 2.8% from a year ago, Cohen said.
The median existing home price decreased from $256,900 in September to $255,400 in October (not seasonally adjusted). This represents a 3.8% increase from a year ago, Cohen noted.