October marked the second straight month of national home sales growth, though all four major U.S. regions still reported year-over-year declines, according to Bill McBride in his CalculatedRisk Newsletter. Low year-over-year sales rates for 2021 will likely continue through the end of the year due to high levels of home sales during the final months of 2020 after a delayed buying season.
Though sales in October rose 0.8% from the previous month, housing inventory decreased to 1.25 million with a 12.0% year-over-year drop for the month of September. As a result, steadily rising house prices are still on track for the longest running year-over-year increase on record.
Sales in October (6.34 million SAAR) were up 0.8% from last month, and were 5.8% below the October 2020 sales rate.
Some of the increase in sales since the beginning of the pandemic was probably related to record low mortgage rates, strong second home buying, a strong stock market and favorable demographics.
According to the NAR, inventory decreased to 1.25 million in October from 1.26 million in September. Inventory usually declines seasonally in October, and then decreases significantly in November and December as potential sellers remove their homes from the market for the holidays. Although inventory is up from the lows last winter, inventory is still very low.