By Amara Omeokwe and Eric Morath
WASHINGTON--Sales of previously owned homes rose in October after a decline the previous month, with gains concentrated in mid- and high-priced homes, a sign limited inventory is posing challenges for sales of homes priced at the low end.
Existing-home sales rose 1.9% in October from the previous month to a seasonally adjusted annual rate of 5.46 million, the National Association of Realtors said Thursday. Economists surveyed by The Wall Street Journal forecast sales increased 1.5% last month.
Sales in October increased 4.6% from the same month the previous year, marking the fourth straight month of year-over-year gains. September sales were revised down to 5.36 million, compared to an earlier estimate of a 5.38 million pace.
Homes in the $500,000 to $750,000 range saw the strongest sales gains in October versus a year ago. Sales of homes priced below $250,000 declined year over year.
A lack of inventory has driven home prices up this year, a factor that could be limiting sales. There was a 3.9 month-supply of homes on the market at the end of October, at the current sales pace. The median-sales price for an existing home in October was $270,900, up 6.2% from the previous year. The increase was the strongest price appreciation since June 2017, according to the National Association of Realtors.
"The buyers are coming back, but the lack of inventory is pushing up prices, in my view, way too fast," said Lawrence Yun, the trade group's chief economist.
October's increase in overall sales comes amid favorable borrowing conditions for buyers. While mortgage rates have ticked up in recent months, they remain low by historical standards. The average interest rate on a 30-year fixed-rate mortgage stood at 3.75% at the end of last week, according to Freddie Mac.
Other recent data have pointed to a firming in the U.S. housing market. The National Association of Homebuilders reported that a gauge of home-builder confidence edged lower in November from October, but was still near its highest levels in 2019. Meanwhile, new-home construction climbed 3.8% in October from the previous month, according to the Commerce Department. Residential permits-which can signal the volume of forthcoming construction-also rose in October.
News Corp., owner of The Wall Street Journal, operates Realtor.com under license from the National Association of Realtors.
(END) Dow Jones Newswires
November 21, 2019 10:15 ET (15:15 GMT)
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