U.S. Pending Home Sales Edged Higher in October
November 30 2016 - 10:40AM
Dow Jones News
WASHINGTON—The number of homes that went under contract inched
higher in October, a sign the housing market could be plateauing in
the final months of the year.
The National Association of Realtors said Wednesday that its
pending home sales index, which tracks contract signings for
previously owned homes, edged up 0.1% from a downwardly revised
September reading to a seasonally adjusted 110.0. Sales typically
close within a month or two of signing.
The slight gain matched the expectation of economists surveyed
by The Wall Street Journal.
October's reading was 1.8% above where the index stood in
October a year ago, and the highest since July.
"Activity in all four regions is up from a year ago," said
Lawrence Yun, the trade group's chief economist. He said that
despite "limited listings and steadfast price growth," buyers were
likely locking in October's low mortgage rates, which have climbed
to around 4% in November.
News Corp, owner of The Wall Street Journal, also operates
Realtor.com under license from the National Association of
Realtors.
Purchases of existing homes, which account for roughly 90% of
U.S. homebuying activity, rose in October for a second straight
month to hit an annual rate of 5.60 million, the strongest monthly
reading since February 2007, the National Association of Realtors
said last week. But the median price of an existing home sold in
October was $232,200, up 6.0% on the year, a steep rise that for
many workers outpaces annual wage gains.
In September, U.S. home prices climbed back above the record
reached more than a decade ago, according to the S&P CoreLogic
Case-Shiller U.S. National Home Price index released Tuesday.
Purchases of newly built single-family homes were well up
through October, compared with the first 10 months of 2015, the
Commerce Department said in a separate report released last week.
But supplies of those properties remain limited, one factor putting
upward pressure on existing-home prices.
Borrowing costs remained low in October for prospective home
buyers who qualified 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 the average rate on a 30-year fixed conforming mortgage has
risen to 4.16%, according to the Mortgage Bankers Association, up
from post-Brexit lows around 3.6%.
Mortgage rates could continue to rise if, as many economists
surveyed by The Wall Street Journal predict, Federal Reserve
officials raise interest rates at their December policy meeting.
That could curb enthusiasm for home buying.
Write to Anna Louie Sussman at anna.sussman@wsj.com
(END) Dow Jones Newswires
November 30, 2016 10:25 ET (15:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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