Sales of existing U.S. homes rose for the second month in a row, according to the National Association of Realtors, aided by super low interest rates and a stronger economy.
Total existing-home sales increased 1.5 percent to a seasonally adjusted annual rate of 5.26 million last month, up from 5.18 million in September and up 2.5 percent from one year ago. Sales have reached their highest pace since September 2013.
At the same time, the number of existing-homes on the market fell 2.6 percent from last month to 2.22 million units. At the current sales pace, that represents a 5.1-month supply, the lowest since March. Still compared with October 2013, inventory is up 5.2 percent.
The median price rose 5.5 percent from the previous year, increasing to $208,300. That marks 32 straight months of year-over-year price gains.
“Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” said NAR chief economist Lawrence Yun. “Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases.”
Mortgage interest rates fell to their lowest levels in more than a year, according to Freddie Mac. The average rate on a 30-year fixed-rate conventional mortgage dropped to 4.03 percent in October, down from 4.16 percent in September and the lowest average since June 2013.
More good news for the housing market: the percentage of distressed home sales fell into single-digit territory in October. Foreclosures and short sales made up just 9 percent of all sales, down from 10 percent in September and down from 14 percent a year earlier.