🚀 Read this trending post from Investopedia | Expert Financial Advice and Markets News 📖
📂 Category: Economic News,News
✅ Key idea:
Key takeaways
- Existing home sales rose in October to an eight-month high, as buyers jumped on better mortgage rates and took advantage of abundant inventory.
- While the government shutdown affected some government-backed mortgage loans in flood zones and rural areas, home sellers were able to close deals.
- However, home sales remain near their lowest levels in more than a decade, as rising costs and continuing high interest rates keep some buyers on the sidelines.
No government, no problem for US home sellers across the US in October.
Existing home sales in October rose to a seasonally adjusted annual rate of 4.1 million, an increase of 1.7% from the same month last year. This makes October the best month for home resales since February, National Association of Realtors data showed. It’s the fourth month in a row that existing home sales have improved year-over-year.
Homebuyers were likely driven by favorable borrowing costs, as mortgage rates averaged 6.25% in October, lower than the 6.43% rates homebuyers faced in October 2024. A steady supply of inventory also helped, with national October home supply coming in 4.4 months ahead of year-ago levels, though shrinking slightly since September.
Additionally, the government shutdown doesn’t appear to be a major hurdle for homebuyers. Experts warned that purchases could be disrupted by issues with mortgage approvals, income verification, federal flood insurance or the Rural Home Buyers Program.
Why is this important for the economy?
Existing home sales are a broad indicator of the health of the U.S. economy, as well as a key data point for home buyers and sellers who want to assess how competitive the current real estate market is.
“Existing home sales rose again in October despite the government shutdown and ongoing concerns about more layoffs in the economy,” said Heather Long, chief economist at Marine Federal Credit Union. “In addition to lower mortgage rates, potential buyers are also encouraged by the large supply of homes for sale this year. Buyers have more options, lower interest rates, and there isn’t as much competition.”
Sales remain close to contract lows
While it may be an improving buyers’ market, sales have remained near their lowest levels in more than a decade, with high costs continuing to deter many potential homebuyers from acting.
“Sales remain weak as high mortgage rates and flat existing home listings limit both the supply and demand sides of the market,” Nationwide economist Daniel Filber wrote. “The current side of the housing market is expected to continue to struggle in the coming months, as poor (but improving) housing affordability will keep many potential buyers on the sidelines until 2026.”
The median home price in October was $415,200, up 2.1% from October 2024 levels, NAR data showed. It’s the 28th straight month that home prices have shown year-over-year increases.
💬 Share your opinion below!
#️⃣ #Existing #home #sales #rise #government #shutdown
