Housing Market - Heading into 2025
Existing Home Sales, which reflect closings on existing homes, rebounded in October, up 3.4% from September and 2.9% from a year ago. This was the first annual increase in more than three years. The rise in closings last month makes sense, as the data likely reflects people who were shopping for homes in August and September when rates had moved lower. What’s the bottom line? October’s improvement in Existing Home Sales may be a blip because of the subsequent rise in rates this fall. And while inventory also increased to 1.37 million units available for sale (+0.7% MoM and +19.1% YoY), it’s important to note that many homes counted in existing inventory are under contract and not truly available for purchase. In fact, there were only 954,000 “active listings” at the end of last month, so inventory is tighter than the reporting implies. Regarding demand, homes remained on the market for an average of 29 days in October, while 19% of homes sold above list price, showing that there are still bidding wars in about one-fifth of sales nationwide. Plus, competition is expected to rise when rates move lower. All in all, the pent-up demand for homes combined with ongoing tight supply continues to bode well for housing as an investment and continued home price appreciation over time.
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