Existing Home Sales Turn Down in October

Washington, DC, Nov. 23, 2010 -- Existing-home sales declined in October after two strong monthly gains, according to the National Association of Realtors.

Existing-home sales fell 2.2% to a seasonally adjusted annual rate of 4.43 million in October from 4.53 million in September, and are 25.9% below the 5.98 million-unit level in October 2009, when sales were surging prior to the initial deadline for the first-time buyer tax credit.

Year-to-date there were 4.149 million existing-home sales, down 2.9% from 4.272 million at this time in 2009.

Lawrence Yun, NAR chief economist, said the recent sales pattern can be expected to continue. "The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales. Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels," he said. 

"Based on current and improving job market conditions, and from attractive affordability conditions, sales should steadily improve to healthier levels of above five million by spring of next year."

NAR President Ron Phipps said that overly tight credit is making it difficult for some creditworthy borrowers to qualify for a mortgage.

"We are continuing to deal with a notable share of appraisals coming in below a price negotiated between a buyer and seller," he said.

Total housing inventory at the end of October fell 3.4% to 3.86 million existing homes available for sale, which represents a 10.5-month supply at the current sales pace, down from a 10.6-month supply in September.

First-time buyers purchased 32% of homes in October, unchanged from September, but down from 50% from a year ago during the initial surge for the first-time buyer tax credit.

Investors accounted for 19% of transactions in October; they were 18% in September and 14% in October 2009; the balance of sales were to repeat buyers.