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Existing homes sold at the fastest pace in nearly 10 years last month despite persistently skimpy supplies as faster wage gains and low mortgage rates motivated buyers.

Sales increased 2% to a seasonally adjusted annual rate of 5.6 million from an upwardly revised 5.49 million in September, the National Association of Realtors said Tuesday. That’s the highest level since February 2007 and soundly beat the estimate of a 0.7% rise by economists surveyed by Bloomberg.

“October’s strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply,” said Lawrence Yun, the realtor group’s chief economist.

Housing inventories were paltry again in October, declining to a 4.3-month supply from 4.4 months September. A six-month inventory is considered balanced.

But Yun said, “The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.”

Yet citing the limited stock of homes, Trulia Chief Economist Ralph McLaughlin said, “The housing market still faces headwinds toward a full recovery.”

Average wages increased 2.8% annually in October, the most in seven years. And 30-year mortgage rates averaged 3.94% last week, up from 3.57% the previous week as President-elect Donald Trump’s proposed stimulus drives expectations of accelerating inflation. But mortgages remain cheap by historical standards.

Housing starts reached a postrecession high in October, a development that, if it continues, “could go a long way in giving homeowners much-needed assurance that they can list their home for sale and find a new home to buy within a reasonable timeframe,” Yun said.

In October, single-family home sales increased 2.3% while condominium and co-op sales were unchanged.  The median sales price of all homes was $232,200, up 6% from a year ago.

Sales were up 2.8% in the South, 2.3% in the Midwest, 1.4% of the Northeast and 0.8% in the West.

USA TODAY