The total existing-home sales dropped 3.4 percent to its annual rate of 5.36 million in October from 5.55 million in September.
In October the sales of existing homes were at a healthy pace but still unable to keep up with September's rise, National Association of Realtors reported. Existing-home sales are completed transactions involving single-family homes, townhomes, condominiums and co-ops.
Despite the October decline, sales are still 3.9 percent more compared to last year's 5.16 million. NAR chief economist Lawrence Yun explained that the sales drop in October is due to the pullback in contract signings for the last couple of months.
"New and existing-home supply has struggled to improve so far this fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets," Yun stated. "Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace sales."
Yun also said that as long as there is continued creation of solid jobs, "a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago."
The report revealed that in October, the average existing-home price for all the housing types was $219,600, a 5.8 percent increase compared to October 2014 which was $207,500. There was a decrease of 2.3 percent in total housing inventory at the end of October, with 2.14 million existing homes ready for sale. Compared to last year's record of 2.24 million, the total housing inventory declined by 4.5 percent.
The sales of single-family homes are still 4.6 percent higher than the 4.54 million pace last year, though the numbers dropped by 3.7 percent to a seasonally adjusted annual rate of 4.75 million in October from September's 4.93 million. The average existing-family home price last month was $221,200, indicating a rise of 6.3 percent from October last year.
October also saw a decline of 1.6 percent in existing condo and co-op sales, with a seasonally adjusted annual rate of 610,000 units from September's 620,000. The median price for existing condos was $207,100 in October, a 1.6 percent drop from last year's price.
According to Reuters, a forecast from economists suggested that sales would fall to a rate of 5.40 million units last month, with a drop of 8.7 percent of sales in the West and a 3.2 percent drop in the South. The two regions had large price increases due to tight inventory.
