US real estate market shows sign of confidence in the economy as the home resale rate for the month of January is recorded higher in last 10 years.
According to the National Association of Realtors (NAR), the existing home sales is increased by 3.3 per cent to the annual rate of 5.69 million units in January which was a historical higher figure since February 2007. The industry felt this positive change in December when it jumped up to 5.51 million units. Reportedly, many of the economists had the expectation of resale rate rising by 1.1 per cent.
From an annual growth perspective, sales were up 3.8 per cent from January 2016. A strong labour market has been behind this positive growth which is improving employment opportunities thus enhancing household formation. Despite this boost, the supply has not been up to the mark of demand rate because of which house prices have been lifting.
On the other hand, 30-years fixed mortgage rate is soon to be stabilising after the few hiccups in recent months which is a good sign for the housing market as buyers will no longer go for wait and see approach. Overall, the US housing market will be strengthened as long as the builders and the realtors will be more focused on increasing supply.
Source: ET Realty