Existing home sales increased 5.9 percent year-over-year in October. Numbers from the National Association of Realtors put existing home sales for October at a seasonally adjusted annual rate of 5.60 million in October, a two percent increase from the previous month. This is welcome news from NAR, but it is also important to remember that this was before the spike in mortgage rates we have seen during the last month.

“The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.” Lawrence Yun – NAR chief economist

Those “low” mortgage rates are likely to be a headwind in the coming months. The 2013 taper tantrum caused a spike in mortgage rates that subsequently saw existing home sales fall by 10 percent. As for the “tightening” labor market, that depends on which segment of the population you are talking to. For the majority of Americans wage gains have been pretty difficult to come by, and certainly not strong enough to keep up with real inflation. NAR reported that the median price of an existing home rose 6 percent in October to $232,200. That’s more than twice the rate of increase in wages for the majority of Americans.


The twelve month rolling average for resale home sales volume here in the Houston area is still slightly negative, down a little less than one percent. Inventory is still low in many markets across the U.S., but like Houston those low inventory levels apply more to lower price bands. There is no shortage of home inventory here in Houston Texas, but there is a shortage of quality affordable homes. It will be interesting to see how existing home sales respond to 4 percent mortgage rates.