Home sales in the United States unexpectedly rose to a nine-month high in October, according to a new report from the National Association of Realtors. According to this new report, home sales rose by about 0.8% in October, which is the highest level since January of 2021. Previously, analysts had forecasted that home sales would fall in October, not rise; therefore, this rise in sales is unexpected.
The latest report on the housing market also reveals that investors buying homes has increased in October. Median house prices also rose by about 13.1%, compared to last year’s price of a home.
While home sales have increased last month, there is still a tight supply of homes on the market, which is impacting the market as a whole. Higher prices and a low amount of homes to purchase have resulted in many first-time buyers being shut out from the market. This tight market has resulted in many people turning to rentals.
Sales of homes rose across the nation, mostly in the Midwest and the South. Sales did fall in the Northeast, however. Meanwhile, home sales in the West remained unchanged. As the West is the most expensive region to buy a home in, this isn’t necessarily a surprise to analysts.
While tight supply and high prices are currently shutting out first-time buyers, many analysts expect the market to even out a bit, especially in 2022. Right now, competition is still strong, even though it has slowed down a bit since earlier in 2021.
New home sales have also struggled since the pandemic began, as raw material and labor shortages have kept many homebuilders from being able to build homes in the time frame they previously did. Home sales have soared since the pandemic first began as Americans began moving out of the city to the suburbs or the countryside, searching for more room in their house for offices as many began to rely on remote work. The 2021 surge in housing demand has yet to slow down, even though first-time buyers and low-income buyers have struggled to find accurate housing. While we’re not seeing the surge we did in 2020 for homes, there is still enough competition in the housing market, signaling there is still a strong — if somewhat eased — demand.
Last month, first-time buyers made up about 29% of sales, which is an increase of 1% from the month before. However, it is also a decrease from last year, as October 2020’s first-time buyers made up 32% of sales.
Previously owned homes available to buy on the market hit 1.25 million in October. This is down about 12% from what was on the market a year ago. About 82% of homes that were sold last month were on the market for less than a month.
Homebuilding continues to decline, as homebuilders are still awaiting raw materials and dealing with massive shortages. As a result, the majority of the homes on the market will likely remain previously owned homes.