WASHINGTON — Americans bought homes in October at the fastest pace this year, a sign that the sluggish housing market is turning around.
Sales of existing homes rose 1.5 percent to a seasonally adjusted annual rate of 5.26 million last month, the National Association of Realtors said Thursday. That’s up from a revised pace of 5.18 million in September. October marked the first month in 2014 when sales increased compared to a year ago, registering a 2.5 percent gain. Sales in September of 2013 also hit 5.26 million. Still, the group projects 2014 sales will fall below 2013 levels.
Sales slumped through much of 2014 after a three-year rally following the implosion of the housing market. A harsh winter crippled sales at the beginning of 2014, just as tight credit, rising home prices, and flat incomes increasingly limited the number of buyers who could afford a home.
At the same time, investors are backing off houses to either rent out or renovate and resell.
Over the past 12 months, the share of homes being bought by investors has slipped to 15 percent from 19 percent, according to the association. As the real estate market has mended from the recession, the opportunity has eroded for investors to profit from buying homes at steep discounts.
Just 4 percent of the single-family houses sold in the third quarter were flipped by investors, who frequently bought distressed properties on the cheap, fixed them up, and put them back on the market, according to a report released Thursday by housing data firm RealtyTrac.
Flipping accounted for nearly 10 percent in 2012.
Unlike recent years when flippers bought at a discount and sold the homes at a discount compared with the broader market, sales are now at a 6 percent premium, suggesting that their repairs are more extensive than in the past.
‘‘The flippers aren’t just slapping on a fresh coat of paint and rolling out new carpets,’’ said Daren Blomquist, vice president at RealtyTrac.
Median home prices rose 5.5 percent over the past 12 months to $208,300, according to the October sales report.
First-time buyers have yet to return to the market, representing just 29 percent of sales last month. This group historically accounts for 40 percent of sales.
October sales improved in the Northeast, Midwest, and South compared to the previous month, but purchases declined in the West.