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Existing Home Sales Surge in U.S.
Monday, April 27, 2015 6:40 AM

U.S. home resales surged to their highest level in 18 months in March as more homes came on the market, a sign of strength in housing ahead of the spring selling season. The fairly upbeat report from the National Association of Realtors implied the economy was regaining some momentum after hitting a speed bump at the start of the year.

But tepid retail sales and weak factory data suggested the growth rebound will probably be insufficient to convince the Federal Reserve to raise interest rates in June.

Existing home sales increased 6.1 percent to an annual rate of 5.19 million units in March, the highest level since September 2013. The percent rise was the largest since December 2010. Last month's sales outpaced economists' expectations for a 5.03 million-unit rate.

The outlook for the spring selling season, which runs from April through August, was also boosted by a separate report from the Mortgage Bankers Association showing applications for loans to purchase homes jumped 5 percent last week to the highest level since June 2013.

In March, the inventory of unsold homes on the market increased 5.3 percent from a month ago to 2 million units, the highest level since last November. However, supply was up only 2 percent from a year ago.

Realtors and economists say insufficient equity and uncertainty about the economy's strength were forcing potential sellers to stay longer in their homes. A recent survey by the Realtors association showed homeowners on average staying in their homes for 10 years instead of the typical seven years.

At March's sales pace, it would take 4.6 months to clear houses from the market, down from 4.7 months in February. A supply of six months is viewed as a healthy balance between supply and demand.

 

Source: New York Times, 22 April 2015