The news remains bad when it comes to home sales.
Existing-home sales dropped 4.1% in October from September to an annual rate of 3.79 million, the lowest since 2010. Sales sunk 14.6% from a year ago, according to the National Association of Realtors (NAR).
"Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation," said NAR Chief Economist Lawrence Yun.
Related: Mortgage rates drop again and data show things are looking up in the housing market
While the inventory of unsold existing homes expanded 1.8% in October from September, it still stood only at 1.15 million on Oct. 31. That’s the equivalent of 3.6 months' supply at the current monthly sales pace. A supply-level below six months is considered to be a tight market.
As for mortgage rates, the 30-year fixed rate averaged 7.44% Thursday, down from 7.5% a week ago. That represents the third straight weekly decline, according to Freddie Mac. But it’s still way above last year’s reading of 6.61%.
The price news wasn’t so hot either. The median existing-home sales price climbed 3.4% in October from a year ago to $391,800, a record high for the month.
That constituted the fourth straight month of year-over-year price increases. There was a silver lining: the sales price eased 0.6% from $394,300 in September.
The Bright Side of the Road
Also on the bright side, “multiple offers are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market," Yun said.
And, of course, a price that looks bad to a buyer looks good to a seller. "While circumstances for buyers remain tight, home sellers have done well as prices continue to rise,” Yun said. "In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years."
He sees the recent decline in mortgage rates and the recent climb in home inventories as positive signs too.
"Fortunately, mortgage rates have fallen…, stirring up buying interest," Yun said. "Though limited now, expect housing inventory to improve after this winter and heading into the spring. More inventory will result in more home sales."
But some are not convinced about inventories
But not everyone expects inventories to keep ascending. “A record number of Americans hold no mortgage,” said Jeffrey Roach, chief economist of LPL Financial. “And with high mortgage rates, homeowners will likely stay put, keeping inventories at very low levels.”
So what are you to do if you’re a renter hoping to buy? My recommendation would be to wait until home prices come down. They are cyclical: they don’t always move up. As a renter you generally only have to commit to one year of payments, but for a home it’s often 30 years.
Still, keep in mind that I’m a lifelong renter and may be biased.
