“The housing market is stabilizing, but it has a long road to a full recovery,’’ said Sal Guatieri, a senior US economist at BMO Capital Markets in Toronto. “There are still a lot of depressed properties in the pipeline that will hit the market, and demand likely needs to strengthen above a 5 million annual rate to absorb the overhang of unsold homes and alleviate the downward pressure on prices.’’
Economists’ estimates for US existing home sales ranged from 4.5 million to 5.14 million. The agents’ group revised September’s initially reported 4.91 million pace down to 4.9 million.
Existing-home sales, tabulated when a contract closes, rose 12 percent from the same month last year before adjusting for seasonal variations. Total sales in 2010 were 4.9 million, compared with a peak of 7.07 million in 2005 during the housing boom.
The number of previously owned homes on the market dropped to 3.33 million last month, the fewest since January 2010, the group said.
At the current sales pace, it would take eight months to sell those houses, down from 8.3 months at the end of September. A supply of seven to eight months is consistent with stable home prices. “Maybe we are very close’’ to seeing home prices stabilize, said Lawrence Yun, its chief economist.
Sales increased even as 33 percent of the group’s members reported having problems with contracts or cancellations in October, jumping from 18 percent the prior month, Yun said. The surge last month was not easily explained, he said.
Distressed sales, comprised of foreclosures and short sales in which the lender agrees to a transaction for less than the balance of the mortgage, accounted for 28 percent of the total in October.
Sales of single-family homes increased 1.6 percent to an annual rate of 4.38 million.
Purchases of multifamily properties, including condominiums and town houses, were little changed at 590,000.
