A new report has found that sales
of previously occupied homes in the US rose in October, helped by increased
consumer confidence and low mortgage rates. The National Association of
Realtors report that sales rose 2.1 per cent in October to a seasonally
adjusted rate of 4.79 million, up from 4.69 million in September.
A shortage of homes for sale is
helping to push up prices, as we see next.
Shortage of homes for sale is pushing up prices
The Guardian reports that the increase in sales, along with a jump
in homebuilder confidence this month, ââ¬Ësuggests the housing market continues to
recover.ââ¬â¢ Sales of property in the US are around 11 per cent higher than they
were a year ago.
“Altogether, the report is
encouraging,” said Michael Gapen, an economist at Barclays Capital.
“Our view is that housing is in a recovery phase,” he added, though
it will be restrained by limited credit and modest job gains.
The price of property in the US
is being pushed higher for a number of reasons. One of the key factors is that
there has been a decline in the number of homes listed for sale. There were
only 2.14 million homes available for sale at the end of October 2012, the
lowest supply in 10 years. At the current rate of sales, this supply would be
exhausted in just 5.4 months.
Prices are also benefiting from
the mix of homes being sold. Sales of luxury homes priced at $500,000
(ã313,500) and above have jumped more than 40 per cent in the past year. Sales
of homes and condominiums that cost less than $100,000 (ã62,700) fell 0.6 per
cent.
Applications for mortgage loans
to buy homes have also increased in recent weeks. Applications rose by 11 per
cent in the week ending November 9, compared with a week earlier, the Mortgage
Bankers’ Association said last week. Applications for house purchase are up by
over a fifth (22 per cent) in the past year.
