Existing-home sales improved considerably in October, beating out June's numbers and setting a record for the highest annualized pace in close to 10 years.
June and the summer months are typically the most active homebuying time, but this year presented the market with a number of challenges. Low housing inventory kept buyers at bay, and rising home prices discouraged many prospective buyers from entering the market.
Once autumn hit, many Americans were still in the market, having had little luck during the main homebuying season. In a press release, Lawrence Yun, chief economist at the National Association of Realtors, explained that job market changes have also encouraged homebuyers to make purchases.
"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," Yun said. "These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall."
The annualized rate for October was 5.6 million, a 2% increase over September's revised rate of 5.49 million. The rate for October 2015 was 5.29 million, 5.9% lower than this year's.
"Once autumn hit, many Americans were still in the market."
Prior to October, the highest annualized rate in recent months was June's 5.57 million. The highest rate overall was recorded nearly a decade ago, in February 2007, when it hit 5.79 million.
NAR noted that sales rates rose across all major regions. However, there were some localized regions that experienced decreases. According to the Florida Association of Realtors, Florida existing-home sales fell 5.3% to 20,194 for single-family homes, and dropped 12.3% to 7,955 for townhouses and condos.
Brad O'Connor, chief economist of Florida Realtors®, said in a press release that he doesn't see a clear reason as to why sales might have fallen in October. While some might point to Hurricane Matthew and the recent election as factors, the truth is that most of the sales that closed in October began several months prior to these events.
Further north, October home sales in Wisconsin didn't fall as much as Florida's, but weren't as impressive as the country's as a whole. According to the Wisconsin Realtors Association, just two fewer existing homes were closed on in October compared to the month before: 3,733, as opposed to September's 3,735, the Milwaukee Journal-Sentinel reported.
Out west, California experienced better luck with home sales. According to the California Association of Realtors, sales of existing single-family homes increased 4.1% month over month, bringing the number of homes sold to 442,970. Sales in Southern California and the Central Valley contributed to much of this success.
"With prices continuing to increase amid a low supply of homes for sale on the market, especially in the San Francisco Bay Area and coastal regions, home buyers are migrating toward lower-priced homes in more affordable inland areas," Geoff McIntosh, president of the CAR, said in a press release.
An increased number of homebuyers have helped make this a successful year for the real estate and mortgage industries. If you're in the market for a new home or a conventional mortgage, now is a great time to take advantage of a favorable housing market and low interest rates.
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