Solid home sales in October an 'encouraging' sign
WASHINGTON (AP) -- U.S. sales of previously occupied homes rose solidly in October, helped by improvement in the job market and record-low mortgage rates.
The increase along with a jump in homebuilder confidence this month suggests the housing market continues to recover.
The National Association of Realtors said Monday that sales rose 2.1 percent to a seasonally adjusted annual rate of 4.79 million. That's up from 4.69 million in September, which was revised lower.
The sales pace is roughly 11 percent higher than a year ago. But it remains below the more than 5.5 million that economists consider consistent with a healthy market.
As the economy slowly recovers, more people have started looking to buy homes. Prices are steadily climbing, while mortgage rates have been low all year. At the same time, rents are rising, making the purchase of a single-family home or condominium more attractive.
"Altogether, the report is encouraging," said Michael Gapen, an economist at Barclays Capital. "Our view is that housing is in a recovery phase," he added, though it will be restrained by limited credit and modest job gains.
A separate report Monday showed confidence among homebuilders rose this month to its highest level in six and a half years. The increase was driven by strong demand for newly built homes and growing optimism about conditions next year.
The National Association of Home Builders/Wells Fargo builder sentiment index increased to 46, up from 41 in October. Readings below 50 suggest negative sentiment about the housing market. The index last reached that level in April 2006. Still, the index has been trending higher since October 2011, when it stood at 17.
The Realtors' group said Superstorm Sandy delayed some sales of previously occupied homes in the Northeast. Sales fell 1.7 percent there, the only region to show a decline. Those sales will likely be completed in future months, the group said.
The median price for previously occupied homes in creased 11.1 percent from a year ago to $178,600, the Realtors' said.
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