Existing home sales jumped 10.1% in October to a 6.10 million annual rate and surged by a record amount from last October, the National Association of Realtors reported today.
The months supply of existing homes was 7.0, the lowest level in two and a half years. The year-over-year increase in existing home sales was the largest on record dating back to 1999.
Economists polled by Thomson Reuters expected existing homes to sell at a 5.260 million annual rate in October, according to the median estimate.
The median home price was $173,100 in October, a 7.1% decline from a year ago and the smallest decline in a year. The median sale price declined 1.6% from September. Prices in the Midwest increased 1.1%, the only region to see a price increase.
Lawrence Yun, the NAR's chief economist, said existing home sale prices have "almost" bottomed as there "less of a decline" in sale prices. He said he anticipates a "measurable decline" in existing home sales in December, January and February as the rush to close on houses subdues now that the homebuyer tax credit has been extended.
Congress extended and expanded the homebuyers' tax credit earlier this month. The program was extended until June 30, 2010 and expanded to include some "move up buyers"—home buyers that have already owned a house.
"Now that this tax credit has been extended and expanded in scope, steady existing home sale gains will likely commence early next year amid a continuous flow of foreclosed offerings," Moody's Investors Service said in a report Monday.
Last week, the Commerce Department reported groundbreaking for new home construction fell 10.6% in October. New construction must compete with foreclosure and existing sales, and face very difficult" conditions going forward, Yun said.
