(TNND) \u2014 Zillow says the housing market just recorded its strongest October in three years.<\/p>\n
Inventory continues to recover from record lows, affordability improved, and the month saw a 5% annual increase in both new listings and pending sales.<\/p>\n
Cost challenges remain significant for buyers, but Zillow said the market is balanced on the national scale. And three new major markets became buyers\u2019 markets in October.<\/p>\n
Zillow said<\/a> 19 major markets now favor buyers, nine more than last October.<\/p>\n Jeff Ostrowski<\/a>, a housing market analyst for Bankrate, called the Zillow report \u201cpromising.\u201d<\/p>\n But the housing market is far from fully recovered.<\/p>\n Existing home sales have been flirting with an annual pace of 4 million, with the market constrained by high prices and high mortgage rates.<\/p>\n The \u201clock-in effect\u201d kept sellers on the sidelines, as they didn\u2019t want to trade in their 3% mortgage rates for rates well north of 6%.<\/p>\n And that limited choices for buyers, who were already dealing with the rising costs.<\/p>\n Ostrowski said that a more normal housing market would see about 6 million annual home sales.<\/p>\n \u201cIt wouldn’t be hard to be better than the past two Octobers, just because it’s been such a bleak housing market for a few years,\u201d Ostrowski said.<\/p>\n Mortgage rates<\/a> have been down over the past six weeks or so.<\/p>\n The average 30-year fixed-rate mortgage was 6.27% in mid-October, compared to 6.44% at the same time a year ago and 7.63% two years ago.<\/p>\n Meanwhile, Zillow said the typical U.S. home value was up just 0.1% from last October.<\/p>\n The typical home nationally is now $362,117.<\/p>\n Ostrowski said home prices are still rising, though they\u2019ve \u201cstopped rocketing upwards.\u201d And prices have actually come down in some markets.<\/p>\n Ostrowski said perhaps the lower mortgage rates and cooler price increases will help grease the wheels of the market.<\/p>\n The National Association of Realtors is forecasting a 14% increase<\/a> in home sales next year, along with a 4% increase in home prices.<\/p>\n More activity could be welcome news for first-time buyers, who\u2019ve struggled to break into the market.<\/p>\n