Home sales fell for the ninth straight month in October, as higher mortgage rates scared off potential buyers

Home sales fell for the ninth month in a row in October as higher interest rates and inflation kept buyers out of the market.

The sales of previously owned homes fell in October. The pace is the lowest since December of 2011.

The October reading put sales at a rate of over 4 million units per month. Year-over-year sales were lower.

Sales are slow but the supply is low. There were 1.22 million homes for sale at the end of October, a decrease of just under 1% compared to the previous month and year. 3.3 months is the current sales pace. A balanced market is considered to last six months.

In October, the median price of an existing home was $379,100, an increase of 6.6% from the year before. The seasonal drop in home prices this time of year is deeper than usual and the price gains are decreasing.

Some homes for sale are still getting multiple offers because of the tight inventory. 26% of homes received over the asking price. The average price reduction for homes sitting on the market for more than 120 days was 15.8%.

In October, homes went under contract in 21 days, compared to 19 days in September and 18 days in October 2020. More than half of the homes that were sold in October were on the market for less than a month.

Most of the sales are in the $100,000 to $250,000 range and in the $1 million to $1 million range. There is a shortage of homes in that price range. High-end buyers may be feeling the effects of big losses in the stock market.

First-time buyers made up just 28% of sales, down from 29% the previous year. 40% of home purchases are made by this group. In October, second-home buyers bought just 16% of the homes sold, compared with 17% in the previous month.

The record lows seen at the beginning of the year have been more than doubled. Potential buyers are affected by the recent rate fluctuations. Rates continued to go up in September and October after shooting up in June. They fell back again last week.

Danielle Hale said that the week-to-week volatility in mortgage rates may be a good reason to wait. It's difficult to know how to set and stick to a budget with week to week changes in mortgage rates.