The pace of existing home sales in October grew to its highest level in nearly a decade, the National Association of Realtors said.
Sales expanded for the second straight month, climbing 2.0 percent to a seasonally adjusted annual rate of 5.60 million units, versus September's 5.49 million units. This is the highest pace since February 2007, which recorded an annualized rate of 5.79 million sales. It is also 5.9 percent higher than a year ago (5.29 million).
Existing home sales include completed transactions of single-family homes, townhomes, condominiums and co-ops. Single-family sales jumped 2.3 percent, and have climbed 6.6 percent from a year earlier. Condominium and co-op sales remained unchanged versus September and also on an annual basis.
The real estate firm Zillow expected sales to be flat in October.
"October's strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply," said Lawrence Yun, chief economist for the NAR. "Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes."
In the Midwest, sales grew 2.3 percent for the month, and are now 6.3 percent above a year ago. In the South, transactions rose 2.8 percent, and are now 4.7 percent higher than October 2015. In the West, sales increased 0.8 percent, and are 10.4 percent higher on an annual basis. And in the Northeast, transactions climbed 1.4 percent, and are up 1.4 percent over October 2015.
The median price for all types of existing homes in October was $232,200, up 6.0 percent from a year ago ($219,100), the NAR said. This is the 56th straight month of year-over-year gains.
Housing supply remains tight, the NAR reports. Inventory is down 0.5 percent from September and has declined 4.3 percent from October 2015. At the same time, properties were on the market for 41 days in October, compared to 39 days in September and 57 days a year ago. Housing inventory has dropped annually for 17 straight months.
"The ramp-up in housing starts in October is a hopeful sign that overall supply can steadily increase enough to provide more choices for buyers and also moderate price growth," Yun said. "A prolonged continuation of the robust single-family starts pace seen last month (869,000) would go a long way in giving homeowners much-needed assurance that they can list their home for sale and find a new home to buy within a reasonable timeframe."
The share of first-time buyers was 33 percent in October, and this is down from 34 percent in September but up from 31 percent a year ago. The annual share of first-time buyers was 32 percent in 2015, the highest since 2013 (38 percent).