More people closed deals on home purchases in October than economists expected, driving down the number of homes available for sale to an eight-month supply.
Existing-home sales rose 1.4% from the previous month and were 13.5% above the same month a year earlier. Each month, the National Assn. of Realtors reports the figures in the form of an annual sales pace adjusted for seasonal variations. Last month's pace was 4.97 million, the group reported.
Regionally, sales were up 4.4% in the West over the previous month, up 2.1% in the South, up 2.8% in the Midwest and down 5.1% in the Northeast.
With the increase in sales last month, the number of homes on the market continued to decrease. Real estate agents view that as a positive sign for their business because fewer homes on the market drives up prices and increases commissions. Less supply, however, also means fewer options and increased competition for consumers looking to buy a property.
U.S. housing inventory at the end of October fell 2.2% to 3.33 million previously owned homes available for sale, which represents an eight-month supply at last month's sales pace. A big chunk of the homes selling these days are bank-owned homes, so the housing supply could increase if new foreclosure actions continue to pick up.
The median price paid for all types of previously owned homes — houses, condominiums and town homes — was $162,500 last month, which was a 4.7% decline from October 2010. The share of so-called distressed homes — foreclosures and short sales — declined in October, making up 28% of the market last month, compared with 30% in September and 34% in October 2010.