The U.S. sales rate for previously owned homes fell for the eighth consecutive month in October, the National Association of Realtors reported today, while inventory levels climbed for the ninth consecutive month.
For-sale inventory of previously owned single-family homes reached a supply of 10.5 months in October, the highest level since July 1985. The months’ supply statistic is a measure of the time it would take to sell the total inventory of for-sale homes at that month’s sales rate.
The supply of for-sale condominiums and cooperatives reached 13.1 months in October, bringing the total supply for all resale homes to 10.8 months — up 45.9 percent compared to October 2006.
Home prices tumbled, too, in October. The median resale home price dropped 5.1 percent in October compared to the same month last year, falling to $207,800, and the average price dropped 3.4 percent to $255,500.
For single-family resale homes, the median price sank 6.3 percent in October compared to October 2006, while the median condo and co-op price rose 4.9 percent.
A separate gauge of prices, the Standard & Poor’s/Case-Shiller U.S. National Home Price Index, found that U.S. new- and resale-home prices dropped 4.5 percent in the third quarter compared to the same quarter last year. And another index released this week by the National Association of Home Builders and Wells Fargo found that the national median prices of new and resale homes sold in the third quarter dropped 3.6 percent compared to the same quarter last year.
The seasonally adjusted annual rate of sales for all resale homes was 4.97 million in October, down 20.7 percent compared to that month last year.
This rate is a projection of a monthly sales total over a 12-month period, adjusted to account for seasonal fluctuations in sales activity.
It was the lowest total sales rate since the association combined single-family home sales with condo and co-op sales in 1999.
The sales rate for single-family previously owned homes dropped to 4.37 million in October, which ties the September rate — the lowest since January 1998 when it hit 4.18 million.
Lawrence Yun, NAR chief economist, said in a statement that mortgage availability has improved, though, “We continue to see the biggest impact in high-cost markets that rely on jumbo loans.”
While Federal Housing Administration loans are becoming more popular as the subprime market has dried up, “it will take some time for the change to yield a measurably higher closed sales volume in the aftermath of the subprime collapse,” Yun also said.
Freddie Mac reported that the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.38 percent in October, unchanged from September, which compares with a rate of 6.36 percent in October 2006. Last week, Freddie Mac reported the 30-year fixed rate fell to 6.2 percent, according to the Realtor group’s announcement.
Regionally, the rate of previously owned home sales dropped 12.6 percent in the Northeast compared to October 2006, with the median price rising 1.3 percent.
The sales rate fell 19.4 percent in the South, while the median price slipped 6.7 percent. In the Midwest, the sales rate dropped 16.9 percent compared to October 2006, and the median price dropped 1.6 percent.
And in the West, the rate of all resale home sales fell 33.1 percent compared to October 2006, with the median price falling 6.9 percent.