Existing Home Sales fell 5.9% from September to October to a 4.43 million unit annualized pace, per the National Association of Realtors (NAR). This was slightly stronger than expectations looking for a 7% decline. Sales were also 28.4% lower when compared to October of last year. This is a critical report for taking the pulse of the housing market, as it measures closings on existing homes, which represent around 90% of the market.

What’s the bottom line? While activity has slowed in the housing market, home prices are still being supported by continued low inventory. Plus, the rise in inventory that occurs every summer from parents listing their homes so their kids are settled for the new school year has crested. The number of available homes declined for the third month in a row, from 1.25 million at the end of September to 1.22 million at the end of October. This equates to a 3.3 months’ supply of homes.

However, there were only 754,000 “active listings” in October, which means that 38% of the “inventory” in the Existing Home Sales report is under contract and not truly available. This speaks to demand, as a normal market has 25% of inventory under contract. When looking at the month’s supply of available homes for sale, it’s really 2.5 months. And while there are reports that homes are sitting longer on the market, they are still selling quickly when priced correctly. Average days on market increased slightly from 19 days in September to 21 days in October, while 64% of homes were on the market for less than 30 days.