Existing-home sales rose 3.4% in October as mortgage rates stabilized, generating a rosy market assessment that the "worst of the downturn in home sales could be over."
Sales rose to a seasonally adjusted rate of 3.96 million units in October, the National Association of Realtors said on Thursday.
Sales were 2.9% higher than last October, the first year-over-year increase in more than three years.
The industry association said the 30-year fixed-rate mortgage averaged 6.78% on Nov. 14, down from 7.44% a year ago.
"The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions," said NAR Chief Economist Lawrence Yun.
"Additional job gains and continued economic growth appear assured, resulting in growing housing demand. However, for most first-time homebuyers, mortgage financing is critically important. While mortgage rates remain elevated, they are expected to stabilize."
Mortgage Rate Watch said the last time rates made a "decently big day-over-day move" was Nov. 12.
"Since then, we haven't seen top tier 30yr fixed rates change by more than 0.04% in either direction. More impressively, they've held a range of only 0.06% during that time.," it said. "That's a low volatility environment by any standard."
The housing inventory stood at 1.37 million units at the end of October, the association said, up 0.7% from September and 19.1% from October 2023.
The median existing home price in October was $407,200, up 4.0% from a year ago.
Inventory sits at a 4.2 month supply at the current sales pace, down from 4.3 months in September, but up 3.6 months in October 2023.
"The ongoing price gains mean increasing wealth for homeowners nationwide," Yun said. "Additional inventory and more home building activity will help price increases moderate next year."
First-time buyers represented 27% of sales in October, up from 26% in September, but down from 28% in October last year.
