U.S. Home Sales Reach 13-Year Low in October
In October, U.S. home sales fell to their lowest point in 13 years, due to limited inventory and persistent interest rates. According to a report from the National Association of Realtors, median existing-home prices, however, reached new highs for the month.
Existing Home Sales Drop
Existing home sales dropped 4.1% in October compared to the previous month, resulting in a seasonally adjusted annual rate of 3.79 million. This is the slowest pace since August 2010. Year over year, sales declined by 14.6%, down from 4.44 million in October 2022. These figures include single-family homes, townhomes, condominiums, and co-ops.
Median Home Prices Continue to Rise
Despite the slowdown in sales, median existing-home prices for all housing types in October reached an all-time high of $391,800, a 3.4% increase from October 2022 ($378,800). This marks the fourth consecutive month of year-over-year price increases. NAR Chief Economist Lawrence Yun explained in a news release that, while circumstances for buyers remain tight, home sellers have benefited from rising prices year over year.
Pricier Homes Face Less Competition
Yun noted that generally, more expensive homes see less competition, as they are unique and more difficult to match with buyers’ preferences. Consequently, these homes tend to stay on the market longer and require price concessions compared to what owners initially believed their homes were worth. However, this slowdown doesn’t necessarily apply to the very highest levels of the U.S. luxury housing market.
Luxury Market Remains Optimistic
A report from Redfin earlier this month painted a more optimistic picture of the luxury market, defined as the top 5% of homes in their respective metro area based on market value. According to Redfin, luxury home prices rose 9% to the highest third-quarter level on record, growing nearly three times faster than non-luxury prices.
Impact of Cash Purchases
Redfin Senior Vice President of Real Estate Operations Jason Aleem stated that paying cash helped wealthy buyers weather the storm of high mortgage rates. In the third quarter, 42.5% of luxury homes that sold were purchased in cash, up from 34.6% a year earlier. In comparison, 28% of non-luxury homes were paid for in cash. Affluent Americans continue to spend big despite the challenging market conditions.
While U.S. home sales have reached a 13-year low, median existing-home prices continue to rise due to tight inventory. The luxury housing market remains optimistic, with affluent buyers still making significant purchases. As the market continues to evolve, both buyers and sellers will need to adapt to these changing conditions.
Orginal article: Link To Article – provided by Kansas City Realtors