Home buyers pinching their pennies should rejoice: Existing-home prices are continuing to drop. Sorry, sellers!
The median price of an existing home (i.e. one that has previously been lived in) fell 0.24% from September to hit $247,000 in October, according to the most recent National Association of Realtors® report. And as cash-strapped would-be buyers are well aware, every little bit helps.
In fact, prices have been falling each month since hitting a high of $263,300 in June. That seasonal adjustment is fairly typical, as prices usually soar in summer as the market is flooded with buyers hoping to close on homes before the school year begins.
“We usually see prices go down as we move into the fall. Buyers who are in the market now are usually looking for smaller properties that tend to cost less,” says Chief Economist Danielle Hale of realtor.com®. “[But] in spite of the month-to-month price decline, it’s still a pretty tough market for buyers. There aren’t very many options of homes available for sale.”
Existing homes are also considerably easier on the wallet than newly constructed abodes, which cost a median $319,700 in September, according to the latest available government data. That’s about a third, or 29.4%, less.
However, median prices were still up 5.5% year-over-year. Single-family homes were a median $248,300, while condos and co-ops sold for a little less at $236,800.
The number of October home sales nudged up 2% over September, but were down about 0.9% from a year earlier, according to the seasonally adjusted numbers in the report. (That means the numbers have been smoothed out over 12 months to account for seasonal fluctuations in the market.)
Monthly closings were up across the nation, but they dipped annually in the U.S. particularly in the South, by 1.8%, and the Midwest, at 1.5%. The slight drop in the South may be due to Hurricanes Harvey and Irma, which hammered the Houston area and much of Florida and paused many sales temporarily.
“Job growth … is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home,” Lawrence Yun, NAR’s chief economist, said in a statement. “While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated.”
The cost of buying an existing home also fell in every region—except the West. The median price in the region, home to uber-expensive Silicon Valley and cities like San Francisco, Seattle and Portland, OR, was $375,100. That’s up 0.48% from September and 7.8% higher than a year ago.
The next most expensive region was the Northeast, where the median price was $272,800. That’s down 0.8% month-over-month, but up 6.6% annually.
It was followed by the South, at $214,900. That represents a 1.1% monthly drop, but a 4.6% annual increase. Homes were cheapest in the Midwest at $194,700. That’s a 0.9% dip from September, but a 7.1% rise from October 2016.