Good news for US property market as sales & prices rise
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, ‘suggests the housing market continues to recover.’ 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 (£313,500) and above have jumped more than 40 per cent in the past year. Sales of homes and condominiums that cost less than $100,000 (£62,700) 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.