According to the National Association of Realtors, sales of existing homes in October soared to 4.3% compared with September, as well as a 26.6% annual increase to an adjusted rate of 6.85 million units.
NAR’s Chief Economist, Lawrence Yun, called this “a spectacular gain”. To him, the surge in sales in recent months had offset the spring market losses. And with the news of having a COVID-19 vaccine will soon be available, and with mortgage rates projected to hover around 3% in 2021, he expects the market’s growth to continue into 2021. Yun forecasts existing home sales to rise by 10% to 6M in 2021.
Based on the report, there were 1.42 million existing homes on the market at the end of October, a 19.8% drop compared with October 2019. At the current sales pace, the data represents a 2.5-month supply, the lowest on record.
NAR also said that the median price of an existing home sold in October was $313,000, up 15.5% annually. That is the highest median price on record and reflects the far stronger sales on the higher end of the market.
Danielle Hale, Chief Economist at realtor.com, mentioned that while the rising coronavirus cases could dampen sales, mortgage rates could tick up in the months ahead and test the strength of this seemingly unstoppable housing market.
On another note, investors continue to be strong in the market. The severe shortage of existing homes for sale has been incredibly beneficial for the nation’s homebuilders, who have seen very strong demand. Mortgage applications to purchase newly-built homes were up nearly 33% annually in October, according to the Mortgage Bankers Association.