The number of home resales in the US fell more than what was expected in October, with large declines in regions where biggest price gains were experienced. This suggests a reduction in the pace of the housing market after getting strong gains during the early months of the year, an article from the BNN stated.
But despite the drop in home resales last month, sales seem to be the best in eight years. According to the president of Berkshire Hathaway HomeServices in Irvine, California, Stephen Phillips, "This is the same pattern of tight inventory and low first-time buyers that we've seen for several years now. We're up nicely on units and price from a year ago, so the market is in good position to improve steadily from here."
Numbers were released by the National Association of Realtors on Monday revealing that home sales were a decline from 3.4 percent to a rate of 5.36 million units per year. There were hardly any changes in the September home sales at 5.55 million units; this number was second highest since 2007.
So what caused the decline in sales? Possibly sales declined after contracts to purchase previously owned homes decreed for two straight months.
It was also noted that the US Treasury debt prices have risen after the dollar was up against other currencies. The housing index increased 0.61 percent which outperformed overall stocks.
The decrease in sales may have also come from a drop in housing stats in October and a reduction in the confidence of home builders. Due to these numbers, experts have forecasted that sales will fall to a rate of 5.40 million units from last month.
The housing market is verified by the strengthening labor market which is further boosted by encouraging young adults to leave their parental homes and purchase a home of their own. On the other hand, this is constrained by shortage of homes in the market which increased property prices.
The stock of unsold homes on the market fell 2.3 per cent to 2.14 million units. Supply was down 4.5 per cent from a year ago. At October's sales pace, it would take more than 4 months to clear the stock of houses on the market.
