U.S. home sales unexpectedly rose in October, but higher prices amid tight supply remain a challenge for first-time buyers.
Existing home sales rose 0.8% to a seasonally adjusted annual rate of 6.34 million units last month, the National Association of Realtors said on Monday.
Economists polled by Reuters had forecast sales falling to a rate of 6.20 million units. Sales rose in the most affordable Midwest region and the densely populated South, but fell in the Northeast and were unchanged from a month earlier in the West, which is the most expensive region.
Home resales, which account for the bulk of U.S. home sales, dropped 5.8% on a year-on-year basis.
Sales soared over summer last year amid an exodus from cities to suburbs and other low-density locations as Americans sought more spacious accommodations for home offices and online schooling during the COVID-19 pandemic.
With vaccinations allowing workers to return to offices and schools to reopen for in-person learning, the pandemic tailwind has subsided. Though sales have declined from a peak of 6.73 million unit-pace in October 2020, demand for housing remains strong and continues to run against modest supply.
The median existing house price increased 13.1% from a year earlier to $353,900 in October. There were 1.25 million previously owned homes on the market last month, down 12% from a year ago.
Government data last week showed a sharp decline in single-family homebuilding in October and the largest backlog of houses yet to be constructed in 15 years because of shortages of materials and labor. That could boost housing inventory when the supply constraints ease.
At October's sales pace, it would take 2.4 months to exhaust the current inventory, down from 2.5 months a year ago. A six-to-seven-month supply is viewed as a healthy balance between supply and demand. First-time buyers accounted for 29% of sales last month, from 32% a year ago.
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