In the United States, used home sales rose for a second consecutive month as the prospect of rising mortgage rates on the horizon helped fuel demand.
Existing home sales rose 0.8% in October from the previous month, the National Association of Realtors said on Monday, contradicting expectations of decline. Sales reached a seasonally adjusted annual rate of 6.34 million, compared to economists’ forecast of 6.2 million.
The US housing market has been hot during much of the pandemic, with demand coming from remote workers and other buyers who wanted more space in the suburbs. Home sales were also boosted by record mortgage rates.
But mortgage rates recently rebounded from their lows to around 3%, and an increase in property values has taken a toll on some buyers amid high demand and a shortage of properties available for sale.
“Home sales remain resilient despite low inventories and growing affordability challenges,” said Lawrence Yun, chief economist for NAR. “Inflationary pressures, such as rapidly rising rents and rising consumer prices, may cause some potential buyers to seek the protection of a fixed, consistent mortgage payment. “
Yun added that the shift to remote working arrangements, coupled with record highs in stock markets and house prices, has resulted in increased demand for accommodation in vacation destinations.
The median price of existing homes was $ 353,900 last month, according to the NAR. This was an increase from $ 351,200 in September, but still fell short of the all-time high of $ 362,800 in June.
First-time buyers accounted for 29% of October sales, up from 32% a year ago.