Rise in US Home Sales
Activity in the residential property market in the US continues to gather pace, this is evidenced by the May Existing Home Sales figures just published by the National Association of Realtors. 4.89M home sales were recorded in May’s figures compared to 4.66M in April, the market expectation for this indicator was a rise to just 4.73M home sales. The official month on month Homes Sales Change figure has now expanded to 4.9% from the revised 1.5% seen in April, this is more than double the level of 2.2% change anticipated by market consensus.
The US housing market is recovering from a slump that began in the second half of last year. Rising mortgage rates compounded the problems of rising prices due to a supply shortage. Today’s figures present a clear indication of a rising trend in home sales over the past couple of monthly readings, sales however are still behind this time last year. It is worth noting that although today’s Existing Home Sales figures represent over 9 out of every 10 transactions in the housing market, they tend to be an inferior indicator than the more sensitive Housing Starts numbers for an early warning to any changing trends in the residential property sector.
It is likely that this trend in rising home sales will persist, there has been a stabilization in mortgage rates and employment is continuing to rise, these factors should combine to ensure robustness in this market even after the tapering off of pent up demand for home ownership that built up over the unfavorable winter weather conditions. As these weather condition have improved the New Home Starts data has reflected an increase in the number of residential construction projects breaking ground, a continuation of this trend is fully expected and will serve to address the supply problem that has been elevating prices and keeping many lower income families from the market.
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