Recently released National Association of Realtors (NAR) data shows a decrease in existing home sales, decreasing 4.1% month-on-month. Existing home sales, a metric tracking the sale of previously owned and occupied homes, is an important metric that helps gauge the demand for existing homes listed for sale.
The National Association of Realtors Existing-Home Sales report measures the sales and prices of previously owned and occupied homes, encompassing single-family homes, condos, co-ops, and townhomes, providing an important gauge of housing supply.
Following last month’s drop, October’s decline in existing home sales represents a recent low at 3.79 million sales. While existing home sales have declined since their previous peak in early 2020, median sale prices of single-family homes have grown 24.6% during the last three years.
The recent decline in existing home sales aligns with the NAR’s Pending Home Sales Index (PHSI), a forward-looking index on home sales that have yet to close. As existing home Sales typically lag the index by one or two months, October’s decline aligns with the drop in PHSI for August. However, sales may see a slight rebound next month as PHSI rose by 1.1% in September.
Despite declining sales, NAR data projects a 13.5% increase in home prices in 2024. Home prices are expected to experience upward pressure in response to historically low inventory levels and recent spikes in demand in response to lower mortgage rates.
Plotify's Takeaway:
- Existing home sales decreased by 4.1% month-on-month and 14% over the year
- Median sales prices for previously owned and occupied homes rose to $391,800, up 3.4% from a year ago
- The housing market continues to experience an imbalance between supply and demand, with the NAR predicting increases in home prices in 2024
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