November Home Sales Reach 10-Month Low, But Analysts Expect 2017 Housing Market Gains
According to the latest National Association of Realtors data, the index of US home sales declined by 2.5 points in November to a reading of 107.3, the lowest index level in 10 months. Reuters reported that this was “a sign rising interest rates could be weighing on the housing market,” the National Association of Realtors said. In a statement, the NAR said, “The brisk upswing in mortgage rates and not enough inventory dispirited some would-be buyers.” Analysts polled by Reuters “had forecast a 0.5 percent increase last month.” Bloomberg News reported that purchases decreased 6.7 percent in the West and 1.2 percent in the South “to the weakest level since September 2014.” Bloomberg noted that November’s decline in sales was the first in three months, and an indication of the effects of “a surge in borrowing costs that began after the U.S. presidential election.” NAR chief economist Lawrence Yun explained, “Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract.” Despite November’s dip in contracts for US home sales, USA Today reported that economists say the housing market “is expected to pick up moderately” in 2017, though “rising mortgage rates are likely to temper the gains.” Analysts say Trump Administration policies could set the tone, since some proposed policies “could juice home sales and starts more than anticipated.”
What This Means For Small Businesses
Small businesses have been waiting to expand and plan in the hopes of seeing further indications that the US economy is improving. Although November’s data on US home sales is somewhat discouraging, it may be a temporary setback as the market adjusts to a new Federal government. With economists still anticipating growth in the housing sector for 2017, it remains to be seen how large the impacts of the housing market may be on the overall US economy.
Additional Reading
The Milwaukee Journal Sentinel and ABC News also reported on the latest pending home sales data.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
