Existing home sales rose by 2.1 percent in October from the previous month while home-builder confidence rose to its highest level in November since 2006, both indicators that the housing market recovery may be gaining steam.
Sales of existing homes rose to 4.79 million (seasonally adjusted), up from a revised 4.69 million rate in September, reports The Los Angeles Times. The National Association of Realtors reported that sales were also up in October by 10.9 percent from the year before.
The median home price was also pushed up by a stronger demand to $178,600 in October, which is an increase of 11.1 percent from last year. This is the eighth-straight month that realtors have seen a year-over-year increase — the first time they have seen it since 2005-2006.
Fewer homes on the market helped drive price increases as well. There were 2.14 million existing homes for sale in October, which translates to a 5.4-month supply at the current rate of sale — the lowest number since February 2006, according to Reuters.
The group also believes that Superstorm Sandy had a negative impact on some existing home sales. Lawrence Yun, chief economist at the Realtors group, stated:
“Home sales continue to trend up and most October transactions were completed by the time the storm hit, but the growing demand with limited inventory is pressuring home prices in much of the country.”
Along with the rise in existing home sales, builders are also becoming more confident about the market. The National Association of Home Builders/Wells Fargo Housing Market Index rose to 46 points in November — the seventh straight monthly increase. While the number is not the highest since May 2006, the index still remained below 50, meaning that builders who see the sales conditions as poor still outnumber those who see it as good.
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