Home Sales Tick Up, But Challenges Remain

The housing market saw a small rise in sales of previously owned homes in October. The numbers went up by 1. 2% from September, reaching about 4. 1 million units annually. This increase is a slight improvement from the previous month and a 1. 7% rise compared to the same time last year. The market is influenced by mortgage rates, which fluctuated during the contract-signing period. Rates on the popular 30-year fixed mortgage dropped from 6. 63% in August to 6. 13% in mid-September, then climbed back up to 6. 37% by the end of the month. Currently, the rate stands at 6. 36%. One big issue is the shrinking supply of homes for sale. After increasing for most of the year, the inventory dropped by 0. 7% from September to 1. 52 million units. Despite this, the supply is still 11% higher than last year. At the current sales pace, there's only a 4. 4-month supply of homes, which is still considered low. Prices continue to rise due to the limited supply. The median home price in October was $415, 200, up 2. 1% from October 2024. This marks the 28th consecutive month of annual price increases. Homes are staying on the market longer, averaging 34 days in October compared to 29 days last year. First-time buyers are making a comeback, representing 32% of sales, up from 27% a year ago. However, their success varies by region. In the Northeast, first-time buyers face a lack of supply, while in the West, high home prices are a barrier. The Midwest and South offer more opportunities due to a plentiful supply of affordable homes. Sales growth is strongest at the higher end of the market. Homes priced above $1 million saw a 16% increase in sales, and those between $750, 000 and $1 million saw a 10% gain. In contrast, homes priced between $100, 000 and $250, 000 saw only a 1% increase, and homes below $100, 000 experienced a nearly 3% drop in sales.