Though the monthly increase was modest, it represents a 13.5 percent annual gain since Oct. 2010. The figure includes single-family, townhomes, condominiums and co-ops.
Home prices slip from last year
Meanwhile, the inventory of homes available for sale continued to shrink, falling to 3.33 million, a 2.2 percent decrease from last month and a 13.8 percent annual decline since Oct. 2010. While a shrinking inventory usually boosts home prices, the median sales price fell from last year, down 4.7 percent to $162,500, down from $170,600 one year ago.
Prices declined from last year despite distressed homes, including foreclosures and short sales, making up a smaller share of home sales than they did one year ago. Distressed sales accounted for 28 percent of all sales in October, down from 34 percent 12 months earlier.
The number of homes for sale represents an 8.0 month supply at current sales rates, down from a 10.6 month supply one year ago. A six-month supply is generally considered a healthy balance between supply and demand.
Home sales steady, but weak
Home sales have been generally steady through most of 2011, though at relatively weak levels, according to NAR figures.
“Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales, such as job creation, rising rents and high affordability conditions,” said Lawrence Yun, NAR chief economist. “Many people who are attempting to buy homes are thwarted in the process.”
The NAR has been vocal about problems with home appraisals, which it blames for high rates of sales cancellations. Yun said one-third of NAR members reported cancelled sales in October, up from 18 percent in September and only 8 percent one year early.
Home appraisals can lead to cancelled sales if the appraised price comes in lower than the agreed-upon sales price. Sales can also be cancelled due to rejected mortgage applications, failed home inspections and uncertainty over the National Flood Insurance Program, which has not been reauthorized by Congress.By: Kara Johnson | November 21, 2011
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