Demand for houses remained very high in October even as prices climbed and supply dwindled.
Existing-home sales increased 0.8 percent last month compared to September to a seasonally adjusted annual rate of 6.34 million, the fastest pace since January, the National Association of Realtors said Monday.
Compared with a year ago, sales are down 5.8 percent. Last year saw strong sales following a slowdown in the initial lockdown phase of the pandemic. Remote school and work from home ramped up demand for houses and many Americans sought to remove themselves from city-centers that had been plagued by anti-police demonstrations, riots, and rising crime.
The median existing-home price rose 13.1 percent in October from a year earlier to $353,900. The median existing single-family home price was $360,800 in October, up 13.5 percent from a year earlier.
The volume of single-family home sales rose to a seasonally adjusted annual rate of 5.66 million in October, up 1.3 percent from 5.59 million in September and down 5.8% from one year ago.
Inflation may actually be encouraging some families to buy homes to avoid escalating rents. As well, investors are purchasing homes to rent out.
“Home sales remain resilient, despite low inventory and increasing affordability challenges,” Lawrence Yun, chief economist at the National Association of Realtors, said in the report. “Inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”
Home sales are rising more rapidly for higher-priced homes. Those priced over $1 million saw sales rise 30.6 percent compared with a year ago. Sales of homes priced above $750,000 but less than $1 million were up 25.4 percent. Those between $500,000 and $750,000 rose 17.7%.
Sales were down 2.1 percent for homes priced between $250,000 and $500,000. Sales of less expensive homes were down by more than 24 percent.