Existing-home sales rise slightly as demand remains strong for housing

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Numbers: About 1% increase in sales

Existing-home sales soared higher in October, despite expectations they would do the opposite, underscoring strong demand for housing across the country.

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The National Association of Realtors said Monday that current home sales grew 0.8% between September and October at a seasonally adjusted, annual rate of 6.34 million. Sales are down 5.8% compared to a year ago.

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“Despite low inventory and rising affordability challenges, home sales remain resilient,” Lawrence Yoon, chief economist at the National Association of Realtors, said in the report. “Inflationary pressures, such as rapidly rising rents and rising consumer prices, may have some potential buyers who want the security of a fixed, consistent mortgage payment.”

Economists polled by Businesshala had forecast current-home sales to come in at 6.2 million.

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What happened

On a regional basis, current home sales grew only in the South and Midwest. Meanwhile, the number of homes sold on a monthly basis declined in the Northeast and flats remained in the West.

The median price of a current home sold in October was $353,900, up 13% from a year ago. As of the previous month, unsold inventory was at 2.4-month supply. A 6-month supply of houses is considered a sign of a balanced market.

On a monthly and yearly basis, all-cash sales represented nearly a quarter of all transactions in October.

The big picture: a slow, but strong, housing market

The housing market is back on the ground after the number of homes sold last year. But that doesn’t mean that navigating the market is easy for home buyers.

Danielle Hale said, “The peak of current home sales activity a year ago, a combination of need and opportunity, has prompted many Americans to seek housing at a time of year that doesn’t typically meet the frenzied level of buyers.” sees.” Chief Economist of Realtor.com.

Hale noted that “activity remains well above recent annual totals,” despite not being close to its peak from the previous year. This is a reflection of a number of factors, including, he said, the large number of Americans who are in prime age to buy homes earlier and remote-working opportunities that allow those buyers to consider a wider range of markets.

“Furthermore, sales momentum may begin to pick up as still eager buyers potentially look to more newly listed homes, with most potential sellers looking to enter the market within the next six months,” Hale said. making plans.”

what are they saying

“Sales are well supported by low interest rates and strong job growth, but held back by low listings and fading affordability,” Sal Guatieri, senior economist at BMO Capital Markets, wrote in a report.

“Low inventories and high prices have affected affordability, and sales of both existing and new homes have hit pandemic highs. Note that inventory is gradually increasing, and the average price of existing homes has declined on a month-to-month basis over the past three months, indicating some moderation from record highs,” says Rubeela Farooqui, High Frequency Chief US economist in economics, wrote in a research paper.

market reaction

Dow Jones Industrial Average DJIA,
-0.36%
and S&P 500 SPX,
-0.38%
The two were up slightly in business Monday morning before the report’s release, following the announcement that President Biden would nominate Jerome Powell for a second term as chairman of the Federal Reserve.

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