What’s Going On Here?Fresh data out last week showed US existing home sales hit a 14-year high in October, so you’d better get ready to welcome some friendly new faces into your neighborhood (tweet this). What Does This Mean?Sales of previously owned US homes climbed by 4.3% last month compared to the month before, bringing the annualized number of home sales – that is, the number over the next 12 months if October’s pace were maintained – to almost seven million. That’s the highest level since February 2006, while the all-time highs of 2005 might’ve been beaten too if the supply of homes wasn’t the lowest on record. So it makes sense that prices are on the rise as well, with the median selling price for a home jumping 15.5% from a year ago.
While we’re on the subject of record lows: US mortgage rates are now at their lowest since tracking began, which is arguably driving this whole house-buying bonanza. It’s probably not worth getting too excited, though: that’s the 13th time the record’s been broken this year… Why Should I Care?For markets: Build a better tomorrow.
With the shortage of existing homes boosting demand for new ones, the S&P Homebuilders index – which tracks stocks in the homebuilding industry – has outperformed the overall US stock market by 14% this year. Eager home-builders are certainly playing their part: the construction of one-family homes – the biggest portion of the housing market – just hit its fastest pace since 2007.
The bigger picture: What’s next?
The National Association of Realtors – the organization behind most of this data – reckons the housing market will keep growing into 2021. In fact, it’s said existing home sales will be 10% higher next year thanks to still-low mortgage rates and the impending coronavirus vaccine. As for how much value your framed “Live. Laugh. Love.” calligraphy will add to your bohemian apartment, it just can’t say. | 