Sales of Existing U.S. Homes Rise to Second-Highest Since 2007
Source: Bloomberg
February 23, 2016 — 10:00 AM EST
Updated on February 23, 2016 — 10:26 AM EST
Sales of previously owned U.S. homes unexpectedly rose in January to the second-highest pace since early 2007, indicating the industry will keep prospering.
Closings, which usually take place a month or two after a contract is signed, advanced 0.4 percent to a 5.47 million annual rate, the National Association of Realtors reported Tuesday in Washington. Prices climbed from January 2015 as the number of dwellings on the market fell.
Near record-low mortgage rates, steady job gains and better wage growth are helping encourage prospective buyers, including first-time purchasers. Further strengthening in residential real estate will support the economy and make up for weakness in manufacturing tied to weaker global growth.
“Consumers are pretty keen to purchase a home,” said Gennadiy Goldberg, an economist at TD Securities in New York. “Slow and steady growth is what we want. It’s really positive for the U.S. economy in general.”
Read more: http://www.bloomberg.com/news/articles/2016-02-23/sales-of-existing-u-s-homes-rise-to-second-highest-since-2007
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GummyBearz
(2,931 posts)Its gonna be a fun ride on this roller coaster... WHEEeeeeeeee!!
LanternWaste
(37,748 posts)Unlike the catastrophic housing bubble seen at the start of this century, home price frothiness today is not being fueled by free and easy mortgage credit; far from it. Something far more fundamental is driving it—strong demand and weak supply.
Tight supply should prevent a dramatic move down in home prices. Current prices are also supported by a far larger-than-normal share of all-cash buyers. About one-third of buyers today are not using any financing, which suggests still strong investor demand.
GummyBearz
(2,931 posts)Mortgage requirements are really, really strict (I just went through the process 6 months ago).
All cash buyers are all over the place. But that is where our opinions on the fundamentals differ. All cash buyers are typically investors, not normal middle class families. Normal middle class families don't have half a million dollars in savings (the average price of a 2 bed 2 bath condo in southern california). The all-cash buyers are speculating, and driving up the median price beyond what the median income of people living in the area can pay for. This is exactly what happened in 2006-2008
