Existing home sales surpassed expectations last month, advancing 4.3% compared with September. This brings the year-over-year growth to 26.6% on a seasonally adjusted annualized rate of 6.85 million units, reports CNBC. All data comes from August and September closed sales. Though not quite breaking the record for annualized sales rate, this rate came close to the high of 7.1 million units in February 2005. The National Association of Realtors’ chief economist even predicts the market’s booming activity to continue through 2021 as mortgage rates remain low and promises of a vaccine are on the horizon.
Sales could likely have been stronger if there was simply more available for sale. There were 1.42 million existing homes on the market at the end of October, a 19.8% drop compared with October 2019. At the current sales pace, that represents a 2.5-month supply, the lowest on record. The last time the sales pace was at the current rate, the supply of homes for sale was twice what it is now.
The extreme shortage of homes for sale is adding more fuel to the fire under home prices. The median price of an existing home sold in October was $313,000, up 15.5% annually. That is the highest median price on record and reflects the far stronger sales on the higher end of the market. Sales of homes priced above $1 million nearly doubled while sales fell in the lowest price range.