ARLINGTON, Va.—Existing-home sales rose 4.3% in October to a seasonally-adjusted rate of 6.85 million units, representing a 26.6% increase in sales versus a year ago, the fifth straight month existing-home sales have risen since bottoming out in May, and the highest level reached since February 2006.
"Low interest rates are incentivizing buyers, but dwindling supply is causing bidding wars that are pushing prices even higher—the median price has risen 15.5% since this time last year," said NAFCU’s chief economist and VP of research, Curt Long.
Based on current sales, there was 2.5 months of supply at the end of October, down 0.2 from September. Analysts consider six months of supply to be roughly balanced between supply and demand.
"Luckily, housing starts rose 4.9% in October, but it will take time for new inventory to come online," Long added. "Meanwhile, rising COVID cases may make would-be sellers more reluctant to list their homes. NAFCU sees no immediate end to the surge in home sales or the spike in sales prices."
Sales rose in all regions during the month. The Northeast was up 30.4% versus October 2019, followed by the Midwest (+28.1%), the South (26.5%), and the West (+22.8%). The median existing-home price rose from $311,400 in September to $313,000 in October (not seasonally-adjusted), representing a 15.5% increase from the median price a year ago.