Existing-Home Sales Up as Median Price Jumps for 8th Month: $178,600

Sales of existing homes increased in October, even with some impact from Hurricane Sandy, while home prices rose for the eighth straight month on a year-over-year basis, according to the National Association of Realtors.
The national median price for all existing housing types was $178,600 in October, which is 11.1 percent above a year ago. The last time there was eight consecutive monthly year-over-year increases was from October 2005 to May 2006.
Total existing-home sales, which are completed transactions involving single-family homes, townhomes, condominiums and co-ops, jumped 2.1 percent to a seasonally-adjusted annual rate of 4.79 million in October, from a downwardly revised 4.69 million in September. Sales are 10.9 percent above the 4.32 million-unit level in October 2011.
“Rising home prices have already resulted in a $760 billion growth in home equity during the past year,” said Lawrence Yun, NAR chief economist. “Given that each percentage point of price appreciation translates into an additional $190 billion in home equity, we could see close to a $1 trillion gain next year.”
Distressed homes – foreclosures and short sales sold at deep discounts – represented 24 percent of October sales (12 percent were foreclosures and 12 percent were short sales), unchanged from September. The same component of sales was at 28 percent in October 2011.
Foreclosures sold for an average discount of 20 percent below market value in October, while short sales were discounted 14 percent.
Total housing inventory at the end of October fell 1.4 percent to 2.14 million existing homes available for sale, which represents a 5.4-month supply 4 at the current sales pace, down from 5.6 months in September.
It is the lowest housing supply since February of 2006 when it was 5.2 months. Listed inventory is 21.9 percent below a year ago when there was a 7.6-month supply.
Meanwhile, the 30-year fixed rate mortgage set a new record low of 3.38 percent last week, according to Freddie Mac.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said the historic low shouldn’t be taken for granted.
“Even with rising home prices, we’ll continue to see favorable housing affordability conditions over the coming year, but they won’t last forever,” he said.

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