October Sales Reach Nearly Ten-Year High
According to the latest National Association of Realtors data, US existing home sales were up 2.0% in October. Reuters reports that US home sales rose in October to their highest level in more than nine and a half years. The fall in home sales comes “amid pent-up demand, offering more evidence of a pickup in economic growth in the fourth quarter, but a recent surge in mortgage rates could slow housing market activity.” The NAR said existing home sales increased 2.0 percent to an annual rate of 5.6 million units last month, the highest level since February 2007. Meanwhile, September’s sales pace was revised up to 5.49 million units from the previously reported 5.47 million units. The Wall Street Journal reports economists surveyed by the Journal expected the sales rate to decline in October to 5.45 million. Bloomberg News also reports and quotes NAR Chief Economist Lawrence Yun as saying that the October advance “may be indicative of pent-up demand that was unrealized in the summer.” Meanwhile, Pantheon Macroeconomics chief economist Ian Shepherdson cautioned, “This is all very encouraging, but it has to be seen in the context of the recent decline in mortgage applications, which if sustained likely will push home sales down sharply in the early part of next year.”
What This Means For Small Businesses
Small businesses have been seeking signals of an economic recovery in order to alleviate uncertainty about future growth. While the latest existing home sales data is encouraging, especially to small businesses involved in the housing sector, it is too soon to tell whether this is part of a trend that can lead the housing market out of its post-recession slump and into a sustained rebound that will drive general economic growth.
MarketWatch also covered the latest existing 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.