U.S. Existing-Home Sales Highest Since February 2007
November 22 2016 - 10:50AM
Dow Jones News
WASHINGTON—Homebuying activity rose in October for the second
straight month to a new cyclical high, a sign the housing market is
stabilizing as the year comes to a close.
Sales of previously owned homes rose 2.0% from September to a
seasonally adjusted annual rate of 5.60 million, the National
Association of Realtors said Tuesday. That is the strongest pace
since February 2007.
Economists surveyed by The Wall Street Journal had expected a
sales rate of 5.45 million in October.
Existing-home sales account for the vast majority of U.S.
homebuying activity. After hitting an annual rate of 5.57 million
in June, sales softened over most of the third quarter before
picking up over the past two months. September's sales pace was
revised up to 5.49 million from an earlier estimate of 5.47
million.
Sales were up on an annual basis in all four regions of the
country, pointing to a "broad-based" housing recovery, said
Lawrence Yun, the NAR's chief economist.
Sales of previously owned homes in October were up 5.9% from a
year earlier.
Homebuying continued despite low inventory and rising prices. At
the latest sales pace, it would take 4.3 months to exhaust the
supply of previously owned homes on the market, down from 4.8
months in October 2015. Housing inventory has fallen on a
year-over-year basis for 17 straight months, NAR said. The median
price of an existing home sold in October was $232,200 up 6.0% on
the year.
First-time home buyers accounted for 33% of October sales,
according to NAR, down from 34% in September, a figure that matched
the highest level since July 2012. Distressed sales ticked up 1
percentage point to account for 5% of all sales.
News Corp, owner of The Wall Street Journal, also operates
Realtor.com under license from the National Association of
Realtors.
The U.S. housing market's prolonged recovery following the
2007-09 recession was a solid contributor to overall economic
growth in recent years. But a pullback in residential investment
during the second and third quarters, following eight consecutive
quarters of growth, has acted as a drag on the broader economy.
Still, home-building activity rebounded in October, with starts
in single-family and multifamily housing posting increases, and
permits edging higher as well, the Commerce Department said last
week. Home-builder sentiment also held at an elevated level in
November, the National Association of Home Builders said last week,
although construction is still at historically low levels.
The Commerce Department's report on new home sales will be
released Wednesday.
Borrowing costs remain low for prospective home buyers who
qualify for loans. The average interest rate on a 30-year
fixed-rate mortgage in October was 3.47%, below the October 2015
average of 3.80%, according to Freddie Mac. But mortgage rates have
already risen since then and may continue to, if, as many
economists surveyed by The Wall Street Journal predict, Federal
Reserve officials raise interest rates at their December policy
meeting. That could further damp enthusiasm for home buying.
Write to Anna Louie Sussman at anna.sussman@wsj.com and Jeffrey
Sparshott at jeffrey.sparshott@wsj.com
(END) Dow Jones Newswires
November 22, 2016 10:35 ET (15:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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