USA home sales slump in October as higher prices weigh on buyers

United States existing-home sales fell 3.4% to a seasonally-adjusted annual rate of 5.36 million in October from 5.55 million in September, the National Association of Realtors said today.

With inventories tight, the median house price increased 5.8 percent from a year ago to US$219,600.

“Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace of sales”, Yun said. The median price in the South was $188,800, up 6.2% from a year ago. The supply of existing homes was 4.5% lower at the end of October, compared to the same period a year ago.

This stark difference rendered the reporting on the NAR release today found at the Associated Press, the Wall Street Journal, and Reuters largely useless.

First-time buyers in the real estate market decreased for the third straight year and is at the lowest level in nearly 30 years.

This time, it was existing home sales for October. The appreciation was led by an 8 percent year-to-year advance in the West. Prices have been bolstered by a dearth of supply on the market. Year-to-date, home sales increased 18.7 percent to 1,017, up from 857 during the first 10 months of 2014.

Existing single-family home sales also declined in October, to an annual rate of 4.75 million, a 3.7% drop month-over-month.

Sales of single-family homes, the lion’s share of the market, dropped 3.7 per cent from September, eclipsing the 1.6 per cent fall in condominium and co-op sales.

“Tight supply is an impediment to future growth, and we are not seeing new construction grow enough to fill the void”, Smoke said.

Dave Clark, an economist with the WRA, said it’s a market that shows “sellers can comfortably put their homes on the market and, if it is appropriately prices, those homes are moving relatively quickly”.

Sales of previously owned homes maintained a healthy pace but cooled in October. The high median prices appear to be pushing would be buyers out of the market.

HSH achieved its data by using the standard 28 percent “front-end” debt ratios and a 20 percent downpayment subtracted from the NAR’s median-home-price data. At the other end of the spectrum, the $809,400 median-priced home in San Francisco requires a salary of more than $153,000.

Last month, the stock of unsold homes on the market fell 2.3percent from September to 2.14 million units.

Existing-home sales in the West fell 8.7 percent to an annual rate of 1.16 million in October, but are still 2.7 percent above a year ago. The median price in the West was $319,000, which is 8% above the October 2014 median.