Pace of U.S. home resales jumps
Home buyers last month snapped up previously owned properties at the fastest pace in more than two years, a Realtors group said Monday.
Home resales increased 10.1% to a seasonally adjusted annual rate of 6.1 million units in October from a downward-revised pace of 5.54 million in September, according to the National Assn. of Realtors in Washington. The October figure was up 23.5% from the seasonally adjusted annual rate of 4.94 million units a year earlier. The last time the sales pace was that swift was in February 2007.
The buying was motivated by low interest rates, a credit for first-time buyers and cheap housing, the association said. The national median home price -- the point at which half the homes sold for more and half for less -- was $173,100 in October, down 1% from September and off 7.1% from October of last year. Whether the stabilization of the housing market will continue remains a subject of debate among housing analysts and economists.
In a note to clients Monday, Patrick Newport, U.S. economist for IHS Global Insight, predicted a sales plunge in December, with mortgage loan volume tracked by the Mortgage Bankers Assn. recently dropping to a level not seen in 12 years.
“This surge may last one more month” into November, he wrote.
The Realtors group lobbied heavily for the extension and expansion of the controversial $8,000 credit for first-time home buyers passed by Congress this month. The group contends that the credit has helped motivate buyers and spur sales. Others argue that the credit, which has been plagued by misuse and fraud, has simply been a giveaway to buyers who would have purchased a home anyway.
The expansion of the credit to include a $6,500 incentive for some current homeowners probably will spur some sales, though many are likely to come from people downsizing into smaller, more affordable homes, said Cameron Findlay, chief economist at LendingTree.com. Soaring joblessness is expected to weigh on the housing market for months.
“Certainly, unemployment will be a factor in this equation, and I don’t see any short-term solution for that one,” Findlay said.
In the West, including California, home resales rose 1.6% to an annual rate of 1.31 million in October and are 12% above a year earlier. The median price in the West was $220,200, which is 14.7% below that of October 2008. It was the weakest performance for sales and housing price improvement among the four national regions.
The selling pushed the resold-home inventory at the end of October down 3.7% to 3.57 million, which represented a seven-month supply at the current sales pace, according to the Realtors group.
Distressed properties -- foreclosures or homes whose owners are delinquent on their mortgage payments -- accounted for 30% of U.S. sales in October.
