House sales in the United States last month unexpectedly increased, reaching their highest level in nine months, as higher prices and a lack of supply continued to keep first-time buyers out of the market.
The National Association of Realtors reported on Monday that the percentage of investors buying properties increased last month, indicating increased demand for rental housing as the economy returns to normal thanks to COVID-19 vaccinations.
“Given the incredibly restricted supply of properties for sale, home sales remain resilient,” said Shannon Brobst, an economist at Moody’s Analytics in West Chester, Pennsylvania. “It will continue to be difficult for potential house buyers to find a property that fits their budget.”
According to a survey, current house sales as of October increased by 0.8 percent to 6.34 million units on a seasonally adjusted yearly basis. Sales increased for the second month in a row, reaching their highest level since January. The pace of sales last month was significantly higher than the 5.64 million units sold in 2020 and 5.34 million units sold in 2019.
Sales increased in the least priced Midwest region and the densely populated South, but declined in the Northeast and remained stable in the most expensive region, the West. While home resales, which make up the majority of home sales in the United States, fell 5.8% year over year. However, the annual drop was altered by a sales increase in October 2020.
The market recorded an increase in First-time buyers accounting for 29% of transactions in October, up from 28% in September but down from 32% a year ago. Individual investors or second-home buyers accounted for 17% of all sales. This is down from 13 percent in September and 14% a year ago.
The reappointment of Federal Reserve Chair Jerome Powell to lead the US central bank for a second term sent stocks higher on Wall Street with S&P 500 and Nasdaq both hitting new highs.
The pandemic momentum has died down, as immunizations have allowed employees to return to work and schools to reopen for in-person learning. Although sales have slowed since reaching a high of 6.73 million units in October 2020, demand for housing remained stable and continues to outstrip supply.
In October, the median existing-home price was $353,900, up 13.1 percent from the previous year. The $250,000-$500,000 price range was the most popular for sales.
In October, there were 1.25 million previously owned properties on the market, down 12% from a year ago. Properties sat on the market for an average of 18 days last month. In September, there were 17 days, and there were 21 days a year ago. In October, 82% of properties sold had been on the market for less than a month.
According to data released by the government, due to labor and material limitations, there has been a significant drop in single-family homebuilding in October and the greatest backlog of houses yet to be built in 15 years. However, there are indications that once the bottleneck eases, there could be a boost in home inventory.