National Housing Market Update
According to the National Association of Realtors (NAR) existing home sales, nationally, fell 5.9% in October, and 24.8% year over year. These are indeed steep drops. Further, October represents the ninth straight month of falling home sales. All four major regions of the country featured month over month and year over year declines.
According to Lawrence Yun, Chief Economist for the NAR, “More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher. The impact is greater in expensive areas of the country and in markets that witnessed significant home price games in recent years.”
Total housing inventory in October was 1.22 million units, down 0.8% from September. Unsold inventory is now at a 3.3-month supply, up from 3.1 months in September of this year and 2.4 months from October 2121.
Yun adds, “Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers. In October, 24% of homes received [offers] over the asking price Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%.
The median existing home price in October was $379,100, a gain of 6.6% from October of 2021 ($355,700), as prices rose in all regions. Remarkably, this is the 128thconsecutive increase year over year, the longest consecutive streak ever.
In a slight sign of a weakening market, properties remained on the market for an average of 21 days in October, up from 19 days in September and 18 days in October 2021. Balancing this, however, 64% of homes sold in October 2022 were on the market for less than a month.
Another interesting stat according to NAR’s 2022 Profile of Home Buyers and Sellers, is that the annual share of first-time buyers was 26%, the lowest since NAR began tracking data.
Also, with mortgage rates above 7%, it’s no surprise that all-cash sales in October 2022 were 26%, up from 22% in September.
And according to Freddie Mac, the average commitment for a 30-year fixed mortgage was 6.9% (this is for all of October; but as mentioned earlier, rates toward the end of October rose sharply, well above 7%), up from the September average of 6.11%. Compare this with the average commitment rate in all of 2021: 2.96%).
Let’s look briefly at two home buying categories:
- Single family homes: Sales declined to an annual rate of 3.95 million in October 2022, down 6.4% from 4.22 million in September of 2022, and down 28.2% from one year ago.
- Condo and co-op sales: Sales in October of 2022 were 480,000, down 2.0% from September of 2022 and 30.4% from the previous year. These are indeed sobering numbers.
Regionally, existing-home sales in the northeast fell 6.6% between September and October of 2022. The decline from October 2021 was 23%
In the Midwest, existing home sales fell 5.3% from the previous (September 2022). And sales fell 25.5% from the previous year.
In the South, existing home sales declined 4.8% in October 2022 from the previous month. But again, sales dropped a staggering 27.2 % from this time last year.
Existing home sales in the West declined 9.1% from September to October of 2022. Yet again, the decline from a year ago was a jaw dropping 37.5%.
However, there always some folks who need to sell for a variety of reasons. Please feel free to contact me for a complimentary, in depth discussion concerning the best way to navigate this uniquely complex market.