For the second month in a row, sales of existing homes declined, down 3.2% in October compared to the previous month, according to a National Association of Realtors (NAR) report released today.
The NAR said the number of existing homes sold in October, which includes houses, townhomes, and co-ops, dropped to a seasonally adjusted annual rate of 5.12 million from September's 5.29 million.
The 16-day partial government shutdown pinched home sales last month by creating uncertainty about the economy and slowing loan approvals: 13% of real estate agents reported that transactions had been delayed.
Despite a drop in sales, there were some positive indicators. October's number was 6% higher than October 2012's, according to the NAR. The improved sales results relative to the year-ago period marks 28 straight months of growth year over year. Additionally, noting the market's "constrained inventory," the NAR said October's median sales price was 12.8% higher than 2012, rising to $199,500 nationally.
While the median time on the market increased in October compared to the prior month, 54 days to 50 days, respectively, that's considerably less than October 2012's 71 days, according to the NAR. Distressed home sales -- foreclosures or short-sales -- were 14% of October's sales, which was a marked improvement compared to October 2012 when distressed homes accounted for 25% of all sales. The NAR said part of the gain in median price is because of a smaller share of distressed sales.
The NAR noted that first-time buyers accounted for 28% of purchases in October, unchanged from September, but down from 31% in October 2012.
Existing-home sales in October declined in each of the NAR's four regions -- Northeast, Midwest, South, and West -- led by a 7.1% decline compared to September in the West region. The Northeast experienced a 2.9% drop, followed by a 1.9% decline in the South and 1.6% drop in the Midwest.
NAR chief economist Lawrence Yun said in a statement that, "More new home construction is needed to help relieve the inventory pressure and moderate price gains."
-- Material from The Associated Press was used in this report.
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