U.S. home resales rose to a 10-year high in January despite higher prices and mortgage rates, suggesting that confidence in the housing market and wider economy is improving, bolstering expectations that property prices may rise in the coming months.
According to the latest National Association of Realtors’ (NAR) report, existing home sales increased by 3.3% to a seasonally adjusted annual rate of 5.69m units last month, the highest level since February 2007. The rise was higher than the 1.1% growth forecast by economists.
Although the number of homes coming onto the market rose in January compared with the previous month, it remained near a record low.
The supply-demand imbalance pushed up the average price of a home by 7.1% compared with 12 months earlier to reach $228,900 (£184,470) in January. That was the biggest increase since January 2016.
Based on January’s sales pace, experts estimate that it would take 3.6 months to clear the stock of residential properties on the market, unchanged from December. A six-month supply is viewed as a healthy balance between supply and demand.
Reflecting on the latest U.S. housing data, Chris Rupkey, chief economist at MUFG Union Bank in New York, told the press: “Existing home sales continue to shine and this bodes well for consumer spending which helps the economy go. Team Trump is trying to boost economic growth and today's existing home sales will make the job a little easier.”