Existing-home sales are on the rise, despite the recent impact from Hurricane Sandy. The National Association of Realtors latest report showed that total existing-home sales were up 2.1 percent for the month of October. This is now a seasonally adjusted rate of 4.79 million units.
Single-family home sales were up 1.9 percent. Existing condo and co-op sales rose 3.6 percent.
Lawrence Yun, NAR chief economist, said there was some impact from Hurricane Sandy. "Home sales continue to trend up and most October transactions were completed by the time the storm hit, but the growing demand with limited inventory is pressuring home prices in much of the country," he said. "We expect an impact on Northeastern home sales in the coming months from a pause and delays in storm-impacted regions."
How has this rise in sales affected the national median home price? It is now $178,600 -- up 11.1 percent from October 2011. This is also the eighth consecutive monthly year-over-year increase.
"Rising home prices have already resulted in a $760 billion growth in home equity during the past year," Yun said. "Given that each percentage point of price appreciation translates into an additional $190 billion in home equity, we could see close to a $1 trillion gain next year."
Distressed home sales continue to affect both sales and pricing of homes across the nation. October saw 24 percent of its sales come from distressed properties. Twelve percent of these were from foreclosures and 12 were short sales.
They were 28 percent in October 2011. Foreclosures sold for an average discount of 20 percent below market value in October, while short sales were discounted 14 percent.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said record low mortgage interest rates shouldn't be taken for granted. "Even with rising home prices, we'll continue to see favorable housing affordability conditions over the coming year, but they won't last forever," he said.
"Inflationary pressures are expected to build during the next two years. As a result, mortgage interest rates will also rise with inflation. Buyers who are currently held back by tight mortgage credit standards should work to improve their credit scores so they'll be able to qualify for a mortgage while conditions are still favorable."
With stringent mortgage underwriting standards, Thomas said it's very important to understand credit issues and how credit scores work. "Realtors ® are a good source to learn about lenders with more reasonable terms and ways to increase your likelihood of obtaining safe and sound financing. Buyers can also visit NAR's consumer website, Houselogic.com, and search for "credit score.'"
The median time on market was 71 days in October, little changed from 70 days in September, but down 26.0 percent from 96 days in October 2011. Thirty-two percent of homes sold in October were on the market for less than a month, while 20 percent were on the market for six months or longer.