A single family home is for sale in San Marcos, California.
Even though mortgage rates rose, buyers came back to the market.
Signed contracts on existing homes jumped 7.5% in September, according to the National Association of Realtors. October sales were 1.4% lower than October 2020, but last fall marked a high in the housing market.
Sales will close in one to two months with pending sales. Wall Street was expecting October pending sales to be flat.
October closed sales rose unexpectedly.
Consumers with strong financial footing are signing contracts to purchase a home sooner rather than later, because of fast-rising rents and the anticipated increase in mortgage rates. It is a testament to demand that it is occurring during a time when inventory is low.
The Midwest and South regions had the highest sales in the month.
In the Northeast, pending sales increased by 6.9%, and in the West they increased by 2.1%.
The average rate on the 30-year fixed mortgage went from 3% to 32% by the end of October, according to Mortgage News Daily. Mortgage rates dropped last Friday after the news of the new Omicron variant of the coronaviruses.
Homebuyers on the lower end of the market continue to find very few homes for sale. The total housing inventory at the end of October was 1.25 million units, down from September and down from a year ago. That is a very low 2.4-month supply at the October sales pace. A 4 to 6 month supply is considered a balanced market.
The strong year for the market ends with a surge in homebuying in the fall. The surge began just a few months after the start of the Pandemic in the U.S., and while many thought it would lose steam, it hasn't yet.
The best performance in 15 years is assured by the notable gain in October, which assures that total existing- home sales in 2021 will exceed 6 million.
Sales of newly built homes fell in October, but that may be due to the fact that big builders are slowing sales in order to deal with supply chain issues in construction.
