WASHINGTON (AP) -- The National Association of Realtors reports on the number of previously occupied homes sold in October.
ANOTHER DROP: Economists forecast that sales fell to a seasonally adjusted rate of 5.18 million, according to a survey by FactSet. That would be down from a 5.29 million pace in September and 5.39 million in August. The report is expected to be released at 10 a.m. Eastern Wednesday.
SHUTDOWN FALLOUT: The Realtors predicted that the 16-day partial government shutdown last month would delay some sales. Mortgage rates have also risen from historic lows, making homes less affordable. The average rate on a 30-year, fixed rate mortgage rose last week to 4.35 percent, highest since mid-September.
UP FROM LAST YEAR: Despite the monthly drop, sales in September were still up 10.7 percent from a year earlier. The housing market is healing after a real-estate collapse that slashed sales to an annual pace of 3.45 million in July 2010 from a peak of 7.25 million in September 2005.
The median price of a previously occupied home has risen 11.7 percent over the past year — to $199,200 in September, the Realtors said.
But that was the slowest annual gain in five months. Price increases may be narrowing because more homes are finally coming on the market. The supply of available homes rose 1.8 percent from a year earlier to 2.21 million, the first year-over-year increase in 2 ½ years.
The economy is growing modestly and employers are adding jobs at a slow but steady pace. That's helped more Americans buy homes.
Still, many first-time buyers have been unable to enter the market. They accounted for just 28 percent of purchases in September, down from 32 percent a year ago. In healthier housing markets, they typically make up at least 40 percent of buyers.
First-time buyers are having trouble qualifying for loans because many banks are demanding stronger credit histories and higher down payments since the housing bubble burst.
In their place, investors and Americans willing to pay cash are playing an outsize role in sales. Cash purchases made up 33 percent of September's sales, up from 28 percent a year ago.
- Real Estate