The NAR data on sales of existing homes in October shows a 3.4 percent increase to 3.96 million units at a seasonally adjusted annual rate from 3.83 million units in September. The October level is above the consensus of 3.90 million units in the Econoday survey of forecasters. The level is up 2.9 percent compared to October 2023. The NAR said this is the first year-over-year increase since up 1.8 percent in July 2021.

NAR Chief Economists Lawrence Yun said,""The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions. Additional job gains and continued economic growth appear assured, resulting in growing housing demand. However, for most first-time homebuyers, mortgage financing is critically important. While mortgage rates remain elevated, they are expected to stabilize."

Sales of existing single-family homes are up 3.5 percent in October to 3.58 million units and up 4.1 percent year-over-year. Sales of multi-unit existing homes are up 2.7 percent in October to 380,000 from the prior month and down 7.3 percent compared to October 2023.

The supply of homes available for sales is at 4.2 months' worth in October, down a tick from 4.3 in September, but above 3.6 months in October 2023. Despite a tendency for existing home prices to decline in the second half of the year, October prices edge up 0.1 percent to $407,200 from the prior month and are up 4.0 percent compared to October 2023.

This is good news for current homeowners but means that home prices remain elevated at a time when mortgage rates are also higher. The Freddie Mac rate for a 30-year fixed rate mortgage averaged around 6.2 percent in September and moved up to around 6.5 percent in October, but has since moved higher to around 6.8 percent in November. Sales closing in October reflect mortgages mostly taken out in September and October.

The NAR said homes remained on the market an average of 29 days in October, up a day from 28 in September and 23 days in October 2023. First time buyers account for 27 percent of all sales in October, a bit higher than 27 percent in September but below 28 percent in October 2023. It remains difficult for first time buyers to find an affordable unit.

Home sales are expected pretty steady at a 3.9 million unit annual rate in October after declining marginally to 3.84 million in September from 3.88 in August.

Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as home resales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.

Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.

Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.