The reason for the largest increase in sales of second-hand homes in the United States in October since earlier this year (up 3.4% month on month to 3.96 million units at an annual rate) is that buyers seized the opportunity of the decline in mortgage interest rates in the previous month. At the same time, it is pointed out that although sales have increased, the housing market is facing difficulties due to the fluctuation of mortgage interest rates (currently approaching 7%), limited inventory (the inventory of unsold houses in October increased slightly by 0.7% to 1.37 million units, far below pre pandemic levels), and the tight inventory has led to high housing prices (the median selling price in October increased by 4% year-on-year, setting a record for the highest October in history), as well as related economic factors and industry insiders' views.

The dynamics of the US real estate market have always been closely monitored, especially the performance of the second-hand housing market, which can largely reflect various aspects of the economic situation and market supply and demand. As of October 2024, the US second-hand housing market presents a series of characteristics and trends, and the relevant data and influencing factors are of great analytical value.

1、 The growth trend and reasons for the sales of second-hand houses in the United States in October

（1） Sales data presentation

The data released by the National Association of Realtors (NAR) on Thursday clearly shows the sales of the US second-hand housing market in October. According to statistics, the sales volume of second-hand houses increased by 3.4% month on month, which is equivalent to an annual rate of 3.96 million units. This data exactly matches the median estimate of economists surveyed by Bloomberg, indicating that the sales growth is within the expected market range and has a certain degree of rationality and representativeness.

（2） Reasons for sales growth

The key to the largest increase in second-hand housing sales since earlier this year in October is that buyers accurately captured the favorable opportunity brought by the decrease in mortgage interest rates in the previous month. When there was a downward trend in mortgage interest rates in the previous month, it meant that the cost of purchasing a house was expected to decrease for potential buyers, greatly stimulating their desire to buy a house. Many buyers took this opportunity to sign purchase contracts and successfully completed transactions in October, which greatly boosted the significant increase in second-hand housing sales that month.

2、 Analysis of the Challenges Faced by the Housing Market

（1） The impact of fluctuations in mortgage interest rates

Despite the upward trend in second-hand housing sales in October, the overall housing market in the United States is still deeply mired in difficulties, with the fluctuation of mortgage interest rates posing a significant obstacle.

Looking back to September, mortgage interest rates fell to their lowest point in two years, prompting a large number of buyers to seize the opportunity to sign purchase contracts and complete property transactions the following month (i.e. October). This was an important factor driving the growth of second-hand housing sales in October. However, with the passage of time, the current cost of housing financing has approached a high of 7%. This change is mainly attributed to the combined impact of strong economic data and factors such as Trump's victory in the election. These factors are intertwined, leading to a significant weakening of market expectations for the Fed's interest rate cuts in the coming months, which in turn causes mortgage rates to rise to high levels again and show an unstable fluctuation state. This situation undoubtedly brings many uncertainties to the housing market, not only increasing the economic burden on homebuyers, but also making them face greater difficulties in the process of purchasing a house.

（2） The constraint of limited inventory

In addition to fluctuations in mortgage interest rates, another severe challenge facing the housing market is limited inventory. At present, the high borrowing costs have directly led to a shortage of supply in the second-hand housing market.

Many potential sellers, due to their already locked in low interest rate advantages, are often unwilling to easily list their properties for sale. Because once they choose to sell their property, they are highly likely to face higher borrowing costs when purchasing a new property. Therefore, from the perspective of balancing economic benefits, they are more inclined to maintain their current property ownership status.

However, as the market situation gradually evolves, more and more homeowners are beginning to accept mortgage interest rates of around 6-7% as a new norm and are willing to push their homes into the market for transactions. Nevertheless, based on specific data, the inventory of unsold houses in October only slightly increased by 0.7%, reaching a scale of 1.37 million units. Although inventory has shown a certain upward trend, there is still a huge gap compared to the pre pandemic housing inventory level, far lower than the inventory quantity at that time. This fully indicates that the tight inventory situation has not been substantially improved and still poses a serious constraint on the healthy development of the housing market.

3、 The situation and reasons for the high housing prices

Under the dual impact of relatively weak sales and tight inventory, housing prices in the United States remained at a high level in October. According to the NAR report, the median selling price of second-hand homes increased by 4% year-on-year in that month, reaching a level of $407200, successfully setting a record for the highest price in October in previous years.

The factor of tight inventory has largely led to a very limited number of houses available for selection in the market, thus forming a seller's market pattern to a certain extent. In this market environment, sellers have a relative advantage in housing pricing and are able to set higher prices more autonomously, which in turn drives the continuous rise of housing prices. Even in the context of overall sales not being very strong, housing prices can still maintain a high price level thanks to the seller's market advantage brought about by tight inventory.

The second-hand housing market in the United States showed an increase in sales in October, but the housing market still faces many difficulties, as well as a complex situation of high housing prices. These situations are intertwined and fully reflect the characteristics and challenges of the real estate market in the current economic environment in the United States. It is necessary to continue to pay attention to its subsequent development trend in order to more accurately grasp the direction of the real estate market.