U.S. Previously Owned Home Sales Climb to Three-Month High
Source: Bloomberg
Sales of previously owned homes increased in April to a three-month high, led by a surge in the Midwest and indicating further improvement in the housing market during the busy spring-selling season, National Association of Realtors data showed Friday.
Key Points
Contract closings rose 1.7 percent to a 5.45 million annual rate (forecast was 5.4 million)
Purchases climbed 4.9 percent from April 2015, before seasonal adjustment
Median price of an existing home rose 6.3 percent from April 2015 to $232,500, the highest since June 2015
Sales in the Midwest jumped 12.1 percent to a 1.39 million pace, the strongest since December 2006; purchases were also up in the Northeast
Inventory of available properties dropped 3.6 percent from April 2015 to 2.14 million units
Big Picture
The increase caps a six-month period of greater-than-usual volatility in purchases and may indicate that the housing industry is returning to a more stable growth path on the back of solid hiring and cheap borrowing costs. At the same time, limited inventory is keeping prices elevated, while first-time buyers have been slow to enter the market, curbing housing’s contribution to economic growth.
Economist Takeaways
“The demand side is fairly solid -- you have ongoing job and income growth, you still have favorable mortgage rates and you’re seeing increased household formation,” said Richard Moody, one of the best forecasters of existing-home sales over the past two years, according to data compiled by Bloomberg. “Whether it’s new construction or existing homes, the brake on the pace of activity is the supply side.”
Read more: http://www.bloomberg.com/news/articles/2016-05-20/sales-of-u-s-previously-owned-homes-rise-to-three-month-high
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