Existing-home sales (which include single-family homes, townhomes, condos, and co-ops) decreased 3.4% in October, according to the National Association of Realtors (NAR) release Monday morning.
At a seasonally adjusted rate of 5.36 million, October existing home sales are still 3.9% above a year ago, despite the month-over-month drop. According to Lawrence Yun, NAR chief economist, "a sales cooldown in October was likely, given the pullback in contract signings the last couple of months," as supply is still tight and buyers have few options.
The percentage of first-time buyers hit an all time high in August at 32%, but decreased in September to 29%. In October, the share of existing-home sales purchased by first-time buyers increased again to 31%, a 2% year-over-year increase.
Existing single-family home sales also declined in October, to an annual rate of 4.75 million, a 3.7% drop month-over-month. October's decrease in sales can be partially attributed to low supply of existing single-family homes--inventory has decreased 2.6% month-over-month, and 4.5% year-over-year, making affordability an issue for buyers.
The median price across the U.S. for existing single-family home sales was $221,200 in October, a 6.3% increase year-over-year. Regionally, the median sales price of existing single-family homes has increased most in the West, jumping 8.3% year-over-year to a median sales price of $323,000. However, sales of existing single-family homes decreased most in the West in October, dropping 9.0% to a pace of 1.01 million, from 1.11 million in September.
Our chart below breaks down the percent change in median sales price of existing single-family homes in each region (and across the U.S.) during 2015, compared to the annual median sales price in 2014.
Seasonal slowdown during the winter months is expected, and October's decrease in existing single-family home sales is nothing to be overly concerned about. Despite steady job growth in the majority of markets, and mortgage rates remaining below 4% for three consecutive months, tight inventory of existing homes and affordability issues are a hurdle keeping buyers from the market.