Home sales during October were down by 6.4% from the previous month and down 10.2% from one year earlier, according to new data from RE/MAX Holdings Inc. RMAX. The steepness in the declines was attributed to the near-record sales level from September.
What Happened: The housing market is still dealing with acute inventory shortages. RE/MAX reported October's inventory fell 12.7% from September and down 28% from October 2020 to the fifth-lowest level since the company began tracking this data in 2007. October's 1.3-month supply of inventory tied for second-lowest in the RE/MAX report’s history, alongside July and August of this year.
While inventory continued to shrink, home prices continued to rise. October’s median sales price of $336,000 was up 0.8% from the previous month and up 11.8% from the previous year. None of the 51 metro areas tracked by RE/MAX saw a year-over-year decrease in their median sales price while 30 metro areas recorded double-digit year-over-year increases.
"We're seeing the effects of a long, sustained run-up in prices and month-over-month home sales and the market may be moving past the days of immediate sales, multiple offers and bidding wars on virtually every property," said Nick Bailey, president of RE/MAX, LLC. "That's okay — the October dip in sales, especially after such a busy September, is a step toward a more balanced market and was somewhat overdue.”
What Else Happened: Elsewhere in the housing data sphere, the Mortgage Bankers Association (MBA) reported mortgage applications were down by 2.8% for the week ending Nov. 12. While the MBA’s seasonally adjusted Purchase Index was up by 2% from one week earlier, its Refinance Index fell 5% and the refinance share of mortgage activity decreased to 62.9% of total applications from 63.5%.
“Refinance applications decreased for the seventh time in eight weeks, as mortgage rates moved higher after two weeks of declines,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Activity has been particularly sensitive to rate movements, and last week’s decline was driven by a drop in conventional and FHA refinance applications, which offset an increase in VA refinance applications.
“All mortgage rates in MBA’s survey increased, with the 30-year fixed-rate climbing to 3.2%,” Kan added, noting the “second straight increase in purchase applications suggests that stronger sales activity may continue in the weeks to come. Despite elevated demand, purchase applications were 5.7% lower than a year ago.”
Photo: Mohamed Hassan / Pixabay
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.