Existing-home sales improved in October, gaining 1.4% from the previous month to a seasonally adjusted annual rate of 4.97 million units, according to data released today by the National Association of Realtors. The good news was the result of single-family home sales, which saw a 1.6% rise for the month even as condo and co-op sales remained flat.

The improvement came despite a dramatic jump in the cancellation rate, which hit 33% in October, up from 18% in September and only 8% a year ago.

Still, the report offered plenty of good news. Inventory ticked down to an 8-month supply, from an 8.3-month supply in September; first-time buyers increased their market share to 34%, compared to 32% the month before; and distressed properties fell to 28% of sales, from 30% the previous month.

However, gains have come at the cost of prices. While sales in October were up 13.5% from the previous year, the median sales price fell 4.7% during that time, to $162,500. The average price was down 4.6% year-over-year.

"Home price declines are accelerating," wrote Patrick Newport, U.S. economist at IHS Global Insight, in a statement about the numbers today. "The year-on-year decline in the median single-family home price was dropping at a 5.8% rate in October, the fastest rate of decline since November 2009. This is bad news since falling home prices help perpetuate the feedback loop in which falling home prices drag more homes underwater, which lead to more foreclosures, and further declines in house prices."

Home price stabilization is one of the two critical factors that will determine when the housing market is truly recovering, Newport says; the other being job creation. But while he foresees an improvement in job openings going forward, he says, "Prices are likely to drop further because of the large number of homes working their way through the foreclosure pipeline."

Claire Easley is a senior editor at Builder.