WASHINGTON (MarketWatch) — Home sales in October rose to the fastest pace in a year, helped by cheaper mortgages and growing inventories, according to data released Thursday.

“Buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” said Lawrence Yun, chief economist at the National Association of Realtors.

The average rate for the popular 30-year fixed-rate mortgage has hovered near 4% since mid-October. Cheap mortgages make it easier for buyers to afford a home.

However, low loan payments alone won’t be enough to draw many more buyers in coming months. Home purchasers consider a wide variety of factors, such as their career prospects and their families’ needs. Many parents don’t want to move once the school year has started.

Prospective buyers also have to convince a lender to give them a mortgage, a challenge in the current strict credit environment, especially for young families and other first-time purchasers. Regulators are trying to encourage banks to make more loans, but analysts say federal efforts may only lead to a slight increase in credit access.

“We believe that mortgage activity in 2015 will be very similar to 2014,” said Doug Duncan, chief economist at federally controlled mortgage-finance giant Fannie Mae FNMA, -1.22% “The housing market continues to grind its way upward, but we don’t expect a breakout performance in 2015 as the fundamentals remain somewhat muted.”

In addition to more lending, the housing market is also dependent on a vibrant labor market that consistently adds a healthy number of jobs. Otherwise, the pace of the household formation will remain slow, with families and friends doubling up in homes to save money.

Next: Existing-home sales fastest since September 2013

Sales of existing homes rose 1.5% in October to a seasonally adjusted annual rate of 5.26 million, the highest level since September 2013, NAR said Thursday.

Economists polled by MarketWatch had expected the sales rate to decrease to 5.15 million in October from an originally reported 5.17 million in September. On Thursday NAR revised September’s pace to 5.18 million.

Longer-term trends also looked good: October’s pace of sales was up 2.5% from a year earlier — the first annual growth in a year.

As jobs, wages and the broader economy pick up, sales of previously-owned homes next year could hit the fastest pace since 2006, economists say.

Next: Existing-home prices rise 5.5% from last year

The median sales price of used homes hit $208,300 in October, up 5.5% from the year-earlier period.

Home prices are no longer posting double-digit annual growth rates, which should encourage more buyers to jump into the market. Home prices recently slowed to the slowest annual appreciation in two years, even as certain local markets hit fresh record highs.

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Weaker price growth comes with positive and negative effects. On the plus side: Now that prices are slowing down, and mortgage rates are low, prospective buyers may see an opportunity.

On the negative side: It will take longer for equity to rise for owners, including those who are underwater (they owe more on a mortgage than their home is worth) and struggling with their payments.

Sales of the lowest-priced existing single-family homes were down in October from the prior year, while sales for higher-priced homes rose, according to NAR.

Next: Housing inventory trending higher

October’s inventory was 2.22 million existing homes for sale, a 5.1-month supply at the current sales pace.

In a trend that NAR said supported more sales, the number of homes on the market in October was up 5.2% from the year-earlier period. Rising home prices over the past year have encouraged and enabled more sellers to place their homes on the market.