WASHINGTON (Oct 23): US existing home sales dropped to a 14-year low in September, likely as prospective buyers held out for lower mortgage rates, with house prices remaining elevated.
Home sales fell 1.0% last month to a seasonally adjusted annual rate of 3.84 million units, the lowest level since October 2010, the National Association of Realtors said on Wednesday. Economists polled by Reuters had forecast home resales would be unchanged at a rate of 3.86 million units.
Home resales, which account for a large portion of US housing sales, decreased 3.5% on a year-on-year basis in September. Home resales have struggled to rebound after being depressed by a surge in mortgage rates in the spring.
Mortgage rates initially dropped after the Federal Reserve began cutting interest rates last month, but they have risen over the past three weeks as solid economic data, including retail sales and annual revisions to national accounts, forced traders to abandon expectations for another 50-basis-point rate cut next month. Potential homebuyers are remaining on the sidelines anticipating even lower borrowing costs.
The NAR speculated that the upcoming Nov 5 US presidential election could be making prospective homeowners hesitant to commit themselves. There is, however, no hard evidence that the election is influencing buying decisions.
Source: TheEdge - 24 Oct 2024
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