NAR Existing-Home Sales Report Shows 1.2% Increase in October

Existing-home sales rose 1.2% month-over-month to a seasonally adjusted annual rate of 4.10 million in October and were up 1.7% year-over-year, while the median existing-home price increased 2.1% to $415,200—the 28th consecutive year-over-year gain—and total inventory was 1.52 million units (4.4 months' supply). Sales climbed in the Midwest and South, were unchanged in the Northeast and fell in the West; first-time buyers made up 32% of transactions, median time on market was 34 days, and the average 30-year mortgage rate eased to 6.25%. NAR Chief Economist Lawrence Yun said lower mortgage rates and decelerating rents could reduce inflation and encourage Federal Reserve easing, which would likely bring more buyers into the market.

Analysis

Existing-home sales rose 1.2% month‑over‑month to a seasonally adjusted annual rate of 4.10 million in October and were up 1.7% year‑over‑year, while the median existing‑home price increased 2.1% YoY to $415,200—the 28th consecutive YoY gain. Total inventory stood at 1.52 million units (4.4 months' supply), down 0.7% from September but up 10.9% from October 2024, indicating modest loosening versus last year yet still relatively limited near-term supply.

Regional and product-level divergence is pronounced: the Midwest posted a 5.3% MoM sales jump to 990,000 and the South showed steady gains, while the West saw a 1.3% MoM decline and is down 2.6% YoY; single‑family sales rose to a 3.71 million annual rate and condos to 390,000, with single‑family median price at $420,600 (+2.2% YoY) and condo median at $363,700 (+0.9% YoY). These patterns underscore affordability and inventory advantages in the Midwest and South and pricing/headwind stress for first‑time buyers in the Northeast and West.

Mortgage conditions and buyer composition support demand resilience: the average 30‑year fixed mortgage rate eased to 6.25% in October from 6.35% in September, first‑time buyers accounted for 32% of transactions (up from 27% YoY), and NAR Chief Economist Lawrence Yun cites decelerating rents and lower mortgage rates as factors that could encourage Fed easing and attract more buyers. Key near‑term risks are whether rate declines persist, whether pending home sales confirm the uptick (NAR release Nov 25), and continued regional softness in the West that could cap nationwide momentum.

Key Decisions for Investors

• Consider selectively increasing exposure to housing‑sensitive assets (homebuilder equities, mortgage REITs, building suppliers) conditional on continued declines in mortgage rates and confirming pending‑sales data
• Tilt geographic risk exposure toward Midwest and Southern housing markets where sales and affordability trends are strongest, reduce exposure or avoid adding to West‑focused residential plays given monthly and year‑over‑year softness
• Monitor three primary indicators—30‑year mortgage rate, the NAR Pending Home Sales Index (Nov 25), and regional months' supply—and be prepared to trim or hedge housing positions if rates re‑accelerate or inventory expansions accelerate
• Maintain tactical hedges against a scenario where Fed easing does not materialize (rate hedges or shorter duration fixed‑income positioning), since a reversal in rates would quickly pressure buyer demand