Home sales rise despite increasing mortgage rates

Mortgage rates have increased, yet existing-home sales are on the rise, offering a positive outlook for the housing market. In October, existing-home sales reached 3.96 million, marking the first year-over-year growth since July 2021. The median home price and inventory levels also saw an increase, maintaining a balanced market.

Regionally, Realtor.com® data indicates that inventory recovery has been most pronounced in the South and West. These regions experienced the highest growth in home sales over the past year and recorded minimal price increases.

To further enhance inventory levels, increased homebuilding is necessary. Encouragingly, there has been a rise in homebuilder optimism, which could lead to positive developments in the coming months. However, construction activity in October showed mixed results with little change in permits for the month and a decline over the year due to fewer high-density multifamily permits. Housing starts exhibited similar trends on a year-to-date basis.

This week saw mortgage rates climb to 6.84%, which may pose challenges for home sales in early 2025. While mortgage applications for home purchases rose by 2% during the week, they were still down by 1% compared to last year—the first yearly decline in nine weeks following eight weeks of gains since May 2021.

Realtor.com's weekly housing data reveals that homes for sale continued to increase while listing prices slightly decreased. Notably, properties stayed on the market for ten days longer than a year ago, marking the largest slowdown since July 2023.

A recent postelection survey by Realtor.com found that most homebuyers do not anticipate changes to their plans due to election outcomes. Approximately one in five Republicans reported being more likely to purchase a home post-election, whereas 24% of Democrats indicated they are less likely to buy within the next year.